Treasury Committee publishes Chancellor and OBR responses on forecasting for potential emergency budget

The Treasury Committee today publishes responses from the Office for Budget Responsibility (OBR) and Chancellor of the Exchequer on forecasting for a potential emergency budget or fiscal event in September.

Earlier this week, the Committee sought an assurance that the Treasury is assisting the OBR on a forecast to be published alongside any emergency budget or significant fiscal event.

The Treasury usually gives the OBR ten weeks’ notice of a fiscal event, such as a budget, to enable the OBR to provide an independent forecast of the economy and the UK’s fiscal position.

In response to the Committee, the OBR confirms it began work on a forecast on 29 July following agreement with the Treasury, and would be in a position to publish such a forecast alongside a potential emergency fiscal event in September.

While the forecast may not be as comprehensive as at previous budgets - due to tight timescales - the OBR commits to providing the most complete picture of the economic outlook as possible, and to a standard that meets the requirements of the OBR Charter.

The Chancellor states that, while this preparatory work has begun, the decision to set a date for a new forecast is for the incoming Chancellor.

The Committee has previously called for announcements of major tax changes to be in fiscal events accompanied by OBR forecasts. In its report on the Autumn Budget and Spending Review 2021, published in January, the Committee concluded that major changes to taxation should be announced at a budget or fiscal event, to enable Parliament to consider the measures alongside an independent OBR forecast of the fiscal consequences.

Chair's comments

Commenting on the correspondence, Rt. Hon. Mel Stride MP, Chair of the Treasury Committee, said:

"As a Committee, we have emphasised the importance of major permanent tax changes and other very significant fiscal measures being announced at fiscal events alongside an OBR forecast published at the same time.

These forecasts provide transparency on the health of the nation’s finances to Parliament, the public and critically, to international markets, upon which the UK substantially relies for its borrowing. It is therefore reassuring to hear that the OBR has already started this important work and stands ready to provide a forecast in time for an emergency fiscal event next month.

Given the very significantly increased economic challenges since the OBR’s last forecast in March and the likely significant measures to be brought forward in September by whoever becomes our next Prime Minister, it will be vital that the OBR is requested by whoever is Chancellor in the new Government to publish as full a forecast as possible at that time.”