UK budget watchdog admits its gloomy forecast is probably too negative

The British economy has shrugged off uncertainty since June's vote

UK budget watchdog admits its gloomy forecast is probably too negative

A European Union flag in front of Big Ben in London | Image: Daniel Leal-Olivas PA Wire/Press Association Images

A bitter row has broken out in the UK between the Office for Budget Responsibility – their version of the Fiscal Advisory Council – and many members of the Tory government over the forecast negative economic impact of Brexit.

According to the OBR, the UK will need to borrow close to an additional £60bn and growth will be 2.4% lower directly as a result of Britain’s leaving the UK, but the Head of the agency acknowledged the forecasts were made without access to privileged information about the cabinet’s budget strategy.

Its chairman, Robert Chote has admitted that there is a significant chance that his projections are wrong and that the assessment may be overly negative.

The OBR said, "Our economy forecast is not based on a precise prediction of the outcome of the Brexit negotiations, but rather on broad-brush judgments consistent with a range of possible outcomes.

"We have been given no information about the Government's goals and economic and fiscal outlook expectations for the negotiations that is not already in the public domain."

One minister is reported to have told The Telegraph: "We were told we would be in a recession. We are not. These predictions are worthless."

Some of the more vocal pro-Brexit ministers have attacked the OBR, claiming many of their forecasts were not worth the paper they’re written on while the Chancellor is reported to be taking this latest warning with a pinch of salt.

Pro-Remain MPs hit back at the Eurosceptics, with one former Conservative minister telling Sky News the OBR's forecasts show "the Brexit chickens are coming home to roost."

 

Additional reporting by IRN