29th Sep 2025 10:43
(Alliance News) - Rachel Reeves has called on the Office for Budget Responsibility to do fewer full forecasts, as she said it would make it easier to only do one budget a year.
The UK chancellor said she wanted to bring the government's policies in line with the International Monetary Fund, IMF, which she said had recommended only having one event a year.
Reeves told Times Radio: "The [IMF] have said that we should move to just one major fiscal event a year, and I agree with their recommendations, and to be able to do that, we do need to change the way that the OBR do their forecasting.
"Two full forecasts a year make it harder to have that one fiscal event. There are different ways you could do it, you could do a shorter term forecast, you could do a forecast that just looks at the changes in the economy over that period of time."
She added: "We've already moved to having just one budget a year, but we're trying through these changes to facilitate that."
The IMF has said two forecasts per year is "best practice" to give an assessment of future economic performance, based on current government policy.
However, the perceived advantage of moving to only one OBR forecast a year is it could allow for more policy stability and longer-term planning.
It would mean governments would not necessarily have to change fiscal policy based on mid-year movements in the OBR's central forecast.
The Institute for Government, IfG, has said it has led to too much "fine tuning of policy… in response to frequent movements in highly uncertain economic forecasts".
This year Reeves announced changes in policies in a spring statement, in response to a deterioration in the OBR's forecast.
This was in addition to the Budget, which she will present on November 26.
This was in order to maintain sufficient "headroom", how much the government can increase spending or cut taxes without breaking the fiscal rules Labour set out before taking office.
However the spring statement and those tweaks were carried out despite the government initially saying it only wanted to hold one fiscal event a year.
Reeves has also called for the OBR to factor in the future impact of government policies, including the youth mobility scheme.
In May, the IfG said: "Taking the more radical step of simply asking the OBR to produce only one fiscal and economic forecast a year would have more impact on the political, public and financial market debates that so heavily skew chancellors' behaviour in the UK.
"It would also free up the OBR's time to focus on analysis where they can add more value."
However, the Institute for Fiscal Studies, IfS, has backed the current number of forecasts, but said the current situation is a "bad equilibrium".
In a policy paper published in July, the IfS said: "Our view is that, on balance, the government should not sacrifice the fiscal transparency that comes with a second forecast.
"There is a strong case to adjust and bring forward the introduction of the range for the current budget, so that it applies in-between annual fiscal events from spring 2026. The change would need to be communicated extremely carefully in such a delicate, febrile fiscal environment.
"But, with successful communication, it would be a sensible means of reducing potential policy volatility from spring 2026. That in turn could help cement the chancellor's intention to have only one fiscal event each year. It could do this without a weakening of the UK's fiscal position."
By Harry Taylor, PA Political Staff
Press Association: Finance
source: PA
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