Peter Hoskin

Are the OBR’s growth forecasts too optimistic?

Are the OBR's growth forecasts too optimistic?
Text settings
Comments

Much ado about the Office for Budget Responsibility's growth predictions in the Treasury Select Committee earlier, especially as an OBR official admitted that the cuts and tax hikes in the Budget could conceivably tip us into a double-dip recession. So are the OBR's official forecasts too optimistic, as some are now claiming? Only time will tell, but we can get a decent sense of things by comparing them with the independent forecasts that the Treasury collect here. And this is the result:

In other words, the OBR growth forecasts stick pretty closely to the average independent forecast, although they are a touch more optimistic. Admittedly, these independent forecasts were collected before the Budget (but after the election), so they may be tweaked in a month or two. But, even now, the general consensus seems to support the OBR's position.