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Truss and Kwarteng refuse to release OBR forecasts ahead of budget

Prime Minister Liz Truss and Chancellor of the Exchequer Kwasi Kwarteng
Liz Truss and Kwasi Kwarteng visit a factory in Northfleet, Kent, hours after the chancellor delivered his mini-budget. Photo: Dylan Martinez/Reuters

Prime minister Liz Truss and chancellor Kwasi Kwarteng are set to publish forecasts from the Office for Budget Responsibility (OBR) on 23 November, alongside a fiscal statement, despite calls for them to be revealed earlier.

The pair met with Richard Hughes, head of the budget watchdog, as well as Andy King and Professor David Miles, on Friday at Downing Street to discuss the fallout following last week's mini-budget.

After the meeting, which lasted less than an hour, the OBR said that its independent forecasts will be ready to be delivered to the chancellor on 7 October, which “will, as always, be based on our independent judgment about economic and fiscal prospects and the impact of the government’s policies”.

“We discussed the economic and fiscal outlook, and the forecast we are preparing for the chancellor’s medium-term fiscal plan. We will deliver the first iteration of that forecast to the chancellor on Friday 7 October and will set out the full timetable up to 23 November next week."

Read more: How market chaos has impacted household finances

The UK's independent fiscal watchdog provides forecasts on the economy and public finances based on government plans.

Meanwhile, the Treasury said: “The prime minister and chancellor reaffirmed their commitment to the independent OBR and made clear that they value its scrutiny," and that "they agreed, as is usual, to work closely together throughout the forecast process and beyond."

Watch: OBR arrive at Downing Street for meeting with PM and Chancellor amid market turmoil

Since the chancellor announced a £45bn package of unfunded tax cuts, the pound has slumped against the dollar (GBPUSD=X) and stock and bond markets have been volatile.

Speaking during interviews on Thursday, the pair doubled down on their fiscal measures, and made it clear that a squeeze on government departments was coming, with public spending remaining at levels agreed in 2021 despite inflation eating into those budgets.

The Treasury said on Friday that it would benefit a key Monetary Policy Committee (MPC) meeting on 3 November if the OBR forecast can be provided earlier.

Mel Stride, Tory MP for Central Devon who also chairs the Treasury select committee, said the failure to publish the forecast led to the "unfortunate impression that the government may be seeking to avoid scrutiny".

“The good news is clearly this is being very taken seriously because confidence in the markets needs to be regained and critical to doing that will be to go to the markets and say the OBR has carried out an independent forecast of the proposals put forward by the government and measured against reasonable and credible fiscal rules. The OBR’s view is that those rules can be met,” he told BBC’s Today programme.

Read more: What happened to the markets in the 60 minutes Liz Truss was on the radio?

“It begs the big question of what the OBR will be saying to the prime minister and the chancellor in this meeting today. I strongly suspect that it will be that the circle cannot be squared.

“You can’t come forward with multiple billions of unfunded tax cuts in a high inflationary environment with a very tight labour market and expect that along with various supply side changes, to develop the growth that’s going to pay for those tax cuts. That’s just not feasible and isn’t going to work, so there needs to be a rethink, and that will be a very difficult conversation.”

Watch: How does inflation affect interest rates?