By GREG HEFFER, POLITICAL CORRESPONDENT Published: 16:42 BST, 28 September 2025 | Updated: 16:43 BST, 28 September 2025
Rachel Reeves is set for a clash with Britain's economic watchdog amid claims she could scrap an annual spring forecast.The Chancellor is said to be considering getting rid of the economic and fiscal outlook published by the Office for Budget Responsibility (OBR) each March.This would strengthen her commitment to holding just a single fiscal event each year and bring greater stability to Treasury policy making, sources told Bloomberg.But OBR chief Richard Hughes has pledged to fight the move, it was also reported.The International Monetary Fund has previously suggested that Ms Reeves overhaul the current system of twice-yearly assessments of the public finances by the OBR.It said that 'small revisions' to the OBR's outlook can erode the headroom within the Chancellor's fiscal rules and cause 'significant pressure' for tax and spending changes.Previous reports have suggested that Downing Street wants to end the prospect of being forced to raise taxes or cut spending twice a year, by alrering the UK's fiscal framework.But a leading expert on Sunday warned that sidelining the OBR watchdog could spook bond markets and actually increase the fiscal constraints on the Government. Rachel Reeves, pictured at Labour's conference in Liverpool, is set for a clash with Britain's economic watchdog amid claims she could scrap an annual spring forecastBen Zaranko, associate director at the Institute for Fiscal Studies, said there were 'legitimate gripes about how our fiscal framework is designed and operated'.But he added in an article for The Observer: 'The key point is that if the fiscal rules were jettisoned tomorrow, and the OBR abolished, the fiscal constraints on the Government would remain.'If anything, we'd probably find ourselves more constrained: it would hardly convince sceptical bond market investors that this government takes fiscal sustainability seriously.'And we could expect to pay a premium on our borrowing, further squeezing the public finances.'It comes after Greater Manchester mayor Andy Burnham, who has not ruled out challenging Sir Keir Starmer for the Labour leadership said the Government should not be 'in hock to the bond markets'.At her Spring Statement in March this year, Ms Reeves announced further welfare cuts after the OBR assessed previously-announced changes would not amount to £5bn savings she had claimed.This left Ms Reeves scrambling to fill a shortfall in the public finances and to avoid breaching her fiscal rules.Asked in July this year if she would consider one OBR forecast this year instead of two, Ms Reeves told the Guardian: 'We are looking at how the OBR works.'But I think it is really important to have those independent economic institutions, because if you start undermining those… and getting rid of the checks and balances on a government, I do think that is risky.'But the International Monetary Fund have made some recommendations about how to deliver better fiscal policymaking. And obviously I take those seriously.'The same month, Mr Hughes told the House of Commons' Treasury Select Committee that moving to a single annual forecast would 'make us one of the least fiscally transparent countries in Europe and of any major advanced economy.' A Treasury spokesman said they would not comment on 'speculation'.
