Economic forecast incoming after PM's emergency meeting with watchdog

The Office for Budget Responsibility will independently judge the UK Government's controversial 'Growth Plan'.

Economic forecast incoming after PM’s emergency meeting with watchdog Flickr

An initial economic forecast will be delivered to the chancellor in a week after an emergency meeting between the Office for Budget Responsibility, the Prime Minister and Kwasi Kwarteng.

The fiscal watchdog will provide the financial estimates on October 7, after days of market turmoil saw the value of the pound plummet in the wake of the new Government’s tax-slashing mini-budget.

The Office for Budget Responsibility (OBR) said the forecast “will, as always, be based on our independent judgment about economic and fiscal prospects and the impact of the Government’s policies”.

It comes ahead of a medium-term fiscal plan to be set out by the chancellor on November 23.

Scrutiny of the Government’s costing of individual tax and welfare spending measures is carried out by the OBR at each Budget.

However, Kwarteng refused to let the body to make an economic assessment of his tax cut plans ahead of announcing them in the House of Commons last week.

The OBR made an offer to conduct a forecast for the mini-budget, but the Treasury declined.

Advertisement

Truss and Kwarteng have both insisted that they remain committed to their tax plans, arguing that the £45bn package of cuts is the “right plan” for the economy.

It is despite a dramatic fall in the value of the pound following the announcement by Kwarteng.

The International Monetary Fund (IMF) has also warned the Government over its tax plans.

It urged the chancellor to “re-evaluate” the proposals and risks increasing inequality.

The energy price guarantee, announced by the Prime Minister earlier this month, will come into effect from October 1.

It will see UK households paying up to an average of £2,500 on their energy bill for the next two years.

But charities warn that people will still face bills that are double what they paid last year.