“We have to understand that these are useful but limited forecasts, which should help to guide our decisions, but not determine them.”
MacNae points out that OBR forecast published on March 26 didn’t take into account the government’s £113 billion increase in infrastructure spending, measures in its industrial strategy or its investment in social housing — nor did it account for Donald Trump’s looming tariffs or new trade deals. At best, he argues, they are incomplete snapshots of the public finances — and at worst, they age too quickly to be useful.
In a piece in the left-leaning New Statesman, MacNae puts it in colorful terms, arguing that nobody would cancel a wedding months out because of a forecast of drizzle. “Instead, let’s stay alert, carry an umbrella when needed, and remain flexible,” writes MacNae — who once co-authored a book on mountain safety.
Reeves argues that altering the checks and balances on a government are “risky,” not least because of the importance of the bond markets. But she did say in an interview with the Guardian that she was looking “seriously” at recommendations by the International Monetary Fund about better fiscal policymaking.
A Treasury official, granted anonymity to discuss internal government deliberations, suggested Reeves is considering asking the OBR to only assess compliance with the fiscal rules once a year, while still requesting their fuller forecasts.
Ben Zaranko, associate director at the Institute for Fiscal Studies think tank, agreed that a move away from debates around “spuriously precise” estimates of headroom and the “constant policy tinkering” that results from them is needed.
