Reeves Braces for Fresh Growth Downgrade as OBR Admits to Optimism Bias – Guido Fawkes

Reeves Braces for Fresh Growth Downgrade as OBR Admits to Optimism Bias

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Champions of the Office for Budget Responsibility will be left red-faced again as a new evaluation report from the watchdog admits it has been too optimistic about the UK’s growth forecasts. Shock to no one…

The OBR found it overestimated growth by an average of 0.3% at the two-year mark and a whopping 0.7% over five years. Cumulatively, that’s a 2.2% overshoot over half a decade. Making Reeves’ job even harder…

The OBR said: “We will take stock of the lessons that we have learned from our approach to capturing the impact of government policy measures on our forecast for potential output.” This glaring inaccuracy threatens to force a downgrade in productivity and potential growth estimates come the Autumn Budget – another hammer blow to Reeves’ fiscal plans following a string of costly policy U-turns. Reeves will be regretting tying the Treasury to a forecaster that’s misjudged UK borrowing by £53 billion a year since its creation…