Labour embraced the forecaster’s powerful role, but now finds itself scrambling in the face of gloomy projections
Reeves looks for more headroom in budget to insulate against bond market
For a crew of 50-odd nerds sharing an uninspiring concrete block in Westminster with the Ministry of Justice, the Office for Budget Responsibility has come to wield extraordinary power.
It was the OBR projections of Rachel Reeves’s evaporating headroom that left the chancellor scrambling for welfare cuts in March. And it is the watchdog’s rethink about productivity growth that means the chancellor is sure to deliver a second tax-raising budget on 26 November.
The Treasury is determined to avoid being dragged around by the OBR in 2026. And so, as she draws up a revenue-raising package, the chancellor is aiming to accumulate more headroom against her fiscal rules, so that every £1bn shift is less make-or-break; and to downgrade the status of the OBR’s spring forecast.
