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Office for Budget Responsibility: What is the OBR and why does it matter? Office for Budget Responsibility: What is the OBR and why does it matter?
(about 1 hour later)
An official forecast of how the UK economy is expected to perform will be published on 31 October, the government says.An official forecast of how the UK economy is expected to perform will be published on 31 October, the government says.
It has been under pressure to release an Office for Budget Responsibility (OBR) assessment since last month's mini-budget, which was followed by a fall in the value of the pound and an increase in borrowing costs.It has been under pressure to release an Office for Budget Responsibility (OBR) assessment since last month's mini-budget, which was followed by a fall in the value of the pound and an increase in borrowing costs.
What is the OBR?What is the OBR?
The OBR is independent of the government and examines the impact of Budget decisions. Budgets are when the government announces which taxes it wants to raise or lower and how it intends to spend public money. The OBR is independent of the government and examines the impact of Budget decisions. Budgets are held when the government announces which taxes it wants to raise or lower and how it intends to spend public money.
The OBR's job includes setting out economic forecasts - calculations of the most likely thing that will happen in the future, given all the facts available.The OBR's job includes setting out economic forecasts - calculations of the most likely thing that will happen in the future, given all the facts available.
These forecasts set out the cost and impact of new policies, how much tax will be raised and what it means for borrowing and growth.These forecasts set out the cost and impact of new policies, how much tax will be raised and what it means for borrowing and growth.
Why is the OBR in the news?Why is the OBR in the news?
OBR forecasts were not published alongside the mini-budget on 23 September, and the government was accused of avoiding scrutiny of its plans, which included cutting taxes by £43bn.OBR forecasts were not published alongside the mini-budget on 23 September, and the government was accused of avoiding scrutiny of its plans, which included cutting taxes by £43bn.
After the statement, the value of the pound fell, the cost of government borrowing went up and the Bank of England was forced to step in to protect pension funds.After the statement, the value of the pound fell, the cost of government borrowing went up and the Bank of England was forced to step in to protect pension funds.
Critics - including MPs on the Treasury Select Committee - suggested the lack of forecasts had contributed to this reaction by affecting confidence in the UK economy, and called for them to be published.Critics - including MPs on the Treasury Select Committee - suggested the lack of forecasts had contributed to this reaction by affecting confidence in the UK economy, and called for them to be published.
Former Bank of England governor Mark Carney accused the government of "undercutting" the UK's key economic institutions by not publishing the OBR forecast.
Kwarteng brings forward debt plan to calm marketsKwarteng brings forward debt plan to calm markets
Where does the government borrow billions from?Where does the government borrow billions from?
Why did the pound tumble?Why did the pound tumble?
Why were forecasts not published alongside the mini-budget?Why were forecasts not published alongside the mini-budget?
The OBR normally publishes its own forecasts alongside government Budgets.The OBR normally publishes its own forecasts alongside government Budgets.
It had offered to prepare a draft forecast in time for the mini-budget, but the government did not take it up.It had offered to prepare a draft forecast in time for the mini-budget, but the government did not take it up.
The Treasury defended this decision, saying it had acted at "immense speed" to offer support for households. It added it remained committed to the OBR publishing official forecasts twice a year.The Treasury defended this decision, saying it had acted at "immense speed" to offer support for households. It added it remained committed to the OBR publishing official forecasts twice a year.
Instead, in the aftermath of the mini-budget, the government asked the OBR to produce a forecast for 23 November.Instead, in the aftermath of the mini-budget, the government asked the OBR to produce a forecast for 23 November.
The forecasts will now be brought forward and published on 31 October - alongside the government's plan to pay for the measures and reduce debt. The government initially resisted calls to publish it sooner - but now says the forecasts will be brought forward and published on 31 October - alongside the government's plan to pay for the measures and reduce debt.
Why does the OBR matter?Why does the OBR matter?
The government can request forecasts from the OBR at any time to get independent advice on big policy announcements.The government can request forecasts from the OBR at any time to get independent advice on big policy announcements.
These forecasts are important because a strong one gives investors confidence to put money into the UK economy - whereas a weak one is likely to have the opposite effect.These forecasts are important because a strong one gives investors confidence to put money into the UK economy - whereas a weak one is likely to have the opposite effect.
Bringing forward the OBR's assessment of the mini-budget could also result in a smaller interest rates rise, if markets react positively, says Mel Stride, the MP who chairs the Treasury Select Committee.Bringing forward the OBR's assessment of the mini-budget could also result in a smaller interest rates rise, if markets react positively, says Mel Stride, the MP who chairs the Treasury Select Committee.
This is because it will now be published - alongside the government's debt plan - before the Bank of England announces its next interest rate decision in early November.This is because it will now be published - alongside the government's debt plan - before the Bank of England announces its next interest rate decision in early November.