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Britain's OBR ready to provide emergency fiscal forecasts for new PM

·2-min read

LONDON (Reuters) - Britain's Office for Budget Responsibility (OBR) on Friday said it was preparing forecasts for any emergency fiscal event the new prime minister might wish to announce in September to tackle mounting economic difficulties.

Liz Truss, the favourite to be announced as Boris Johnson's successor on Sept. 5 following a vote of Conservative members, has promised to cut taxes immediately and has said she would introduce an emergency budget "to give support to struggling households" if she is made leader.

Her opponent Rishi Sunak has said he would prioritise tackling inflation, warning that increased borrowing to fund the sort of immediate tax cuts Truss has promised would mean higher interest rates and more persistent inflation.

The Treasury Committee, chaired by Sunak supporter Mel Stride, had written to the OBR to seek "an assurance that the Treasury is assisting the OBR on a forecast to be published alongside any emergency budget or significant fiscal event".

The OBR would normally have 10 weeks notice of any fiscal event so it could produce forecasts, but OBR Chair Richard Hughes confirmed work on such forecasts had already begun.

"If asked by the new Chancellor to produce a forecast on 14 or 21 September, we would be able to do so to a standard which meets the legislative requirements," Hughes wrote in a letter.

Hughes said they would be a less complete set of forecasts than usual.

"But we would do our best in the time available to give the Government, Parliament, and the public the most complete and up-to-date picture of the economic and fiscal outlook as possible," he said.

The OBR's last economic and fiscal outlook was in March. Since then, consumer price inflation has risen to 10.1%. Economists at Citi forecast it could rise to over 18% early next year, and the Bank of England has raised interest rates by 100 basis points.

(Reporting by Alistair Smout; editing by Jonathan Oatis)