Rachel Reeves may be forced to find billions more than expected at her autumn Budget, analysts have warned.
Fears of a move by the Office for Budget Responsibility to slash UK productivity forecasts – which is measured by output per worker – would cause a shortfall in public finances and leave the Chancellor scrambling to find an additional £9billion, or even more.
Allan Monks, UK economist at JPMorgan, told the Financial Times that even shaving 0.1 or 0.2 per cent from productivity would leave a hole of between £9billion and £18billion.
'We don't know precisely what they [the Office for Budget Responsibility] are going to say on productivity, but we have been given indications there will be a downgrade,' one official told the paper.
The latest Office for National Statistics (ONS) figures showed productivity fell in the second quarter of this year compared to a year ago.
