Economic watchdog OBR says its forecasts are optimistic


Robert ChoteImage copyright
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Robert Chote says some people believe OBR forecasts are “too optimistic”

The head of Britain’s economic watchdog has defended its forecasts warning of the cost to Britain of leaving the EU.

The Office for Budget Responsibility infuriated pro-Brexit Tories with its prediction that withdrawal would wipe 2.4% off growth over the next five years while adding £60bn to borrowing.

Robert Chote said OBR forecasts were “more optimistic” than others.

The OBR had to produce forecasts based on stated government policy, he said.

He made the comments after Conservative former cabinet minister Iain Duncan Smith and backbencher Jacob Rees-Mogg said leaving the EU would lead to a more liberal trade regime delivering a boost to the UK economy.

‘Difficult position’

Mr Chote said the OBR’s job was not to predict what it thought was the most likely outcome for the future, “but what the most likely outcome is conditional upon the current stated policy of the government”, he told BBC Radio 4’s Today programme.

“Obviously, the outlook for policy as regards Brexit is not as clearly set out,” he said.

“We don’t know what exactly the government is going to be aiming for and what could be delivered in the negotiations on things like the trade regime, migration.

“We asked them whether they wanted to tell us any more about their policy in all of these areas than is already in the public domain – and they said ‘no’.

“Clearly it would have put us in a very difficult position if they had told us something and said we can’t share that with the rest of the world.”

Mr Chote said that as the likely shape of any post-Brexit settlement became clearer, it could feed into future forecasts – but he warned that was unlikely to happen quickly.

“Will we end up in a world in which there are much lower tariffs both for us and for other countries? Are we going to end up with a very different-looking migration regime? That remains to be seen,” he said.

“We need the policy to clarify itself, but we also shouldn’t delude ourselves that it is going to clarity itself very quickly.”



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