UK Markets open in 8 mins

UK lawmakers insist forecasts should accompany mini-budget

·2-min read
FILE PHOTO: New British Health Chancellor of the Exchequer Kwasi Kwarteng walks outside Number 10 Downing Street in London

LONDON (Reuters) -Britain's new finance minister Kwasi Kwarteng should publish economic and fiscal forecasts from the independent budget watchdog if he announces tax changes in his upcoming fiscal update to parliament, a committee of lawmakers said.

Kwarteng is due to outline plans to help households and businesses through the coming months under the economic agenda of newly-installed Prime Minister Liz Truss.

Investors are keen to hear details about the vast cost of the plans, with estimates ranging between 100 billion and 200 billion pounds ($115-230 billion).

However, the Office for Budget Responsibility will not be producing forecasts for Friday, the government confirmed on Tuesday.

"These forecasts are a vital indicator of the health of the nation's finances, and provide reassurance and confidence to international markets and investors," said Mel Stride, chair of the Treasury Committee which scrutinises the government's economic plans.

Stride - a leading supporter of former finance minister Rishi Sunak in the Conservative Party contest to succeed Boris Johnson - said the economic outlook had soured since the OBR last published forecasts in March.

"There have been significant fiscal interventions since then and we are told there will be further significant interventions including major permanent tax cuts to be announced on Friday," Stride said.

"Under these circumstances, it is vital that an independent OBR forecast is provided."

During the leadership contest, Sunak said Truss's unfunded tax cuts would be inflationary, while Truss said Sunak's increased payroll taxes and plan to raise corporation tax would make a recession more likely.

A spokeswoman for Truss said providing OBR forecasts in time for Friday would have compromised their quality and completeness, given it takes around 10 weeks to compile detailed projections.

"But we remain committed to maintaining the usual two forecasts in this fiscal year," the spokeswoman added.

Last month the OBR said it could provide a partial forecast to go alongside a late September fiscal statement, in addition to the full forecast that will be published with an annual budget due before the end of the year.

(Reporting by Andy Bruce, additional reporting by Alistair Smout, editing by David Milliken and Andrew MacAskill)