Amidst the repercussions of the government’s mini-budget, Liz Truss and Kwasi Kwarteng met with the head of the UK’s independent fiscal watchdog.
Next week, the Office for Budget Responsibility (OBR) will provide the chancellor with an initial prediction that “will always be based on our independent judgment regarding economic and fiscal prospects and the impact of government initiatives.”
The OBR issued a statement indicating that a complete prediction will not be presented for seven weeks, on November 23.
The discussions with the OBR followed a week of the economic crisis in which the pound plummeted, over half of the mortgages were retracted, and pension funds were spared from insolvency.
It is exceedingly unusual for a prime minister to attend an OBR meeting, which is typically held between the watchdog and the chancellor to discuss impending economic forecasts. The Treasury has disputed that this is an emergency measure.
After meeting with the prime minister and the chancellor in Downing Street, Richard Hughes, head of the Office for Budget Responsibility, confirmed the schedule.
Mr. Hughes, speaking outside Downing Street, stated: “The prime minister and chancellor were observed. We discussed the economic and budgetary outlook with them.
We will provide the chancellor with an update next Friday, and we will establish a schedule for our forecasting process the following week.
Added statement: “We will present the initial version of this forecast to the Chancellor on Friday, 7 October, and will outline the entire schedule through November 23 the following week.
As always, the forecast will be based on our independent assessment of economic and budgetary prospects and the effects of government measures.
The meeting took place in response to complaints that an OBR forecast was not released alongside the chancellor’s mini-budget last week.
The OBR is required by law to submit two annual predictions, and on Mr. Kwarteng’s first day as chancellor, it offered him one.
The absence of analysis of the measures announced in the chancellor’s financial statement is believed to have contributed to the instability of the markets during the previous week.
The government established the OBR in 2010 to provide an independent analysis of the United Kingdom’s public finances.
Treasury financial secretary Andrew Griffith told that Ms. Truss and Mr. Kwarteng’s meeting with the OBR was a “really excellent idea.”
An ex-vice-governor of the Bank of England, Sir Charles Bean, described such a summit as “very rare.”
Sir Charles stated that meetings between the chancellor and OBR personnel are common, although the prime minister converses with the watchdog less regularly.
He added that the meeting was analogous to “locking the stable door after the horse had bolted” because the OBR prediction needed to be released alongside the mini-budget to comfort markets.
