Business Secretary Kemi Badenoch has launched a scathing attack on the Treasury's independent fiscal watchdog, the Office for Budget Responsibility (OBR), accusing it of delivering overly negative economic forecasts that could harm business confidence.
In a letter seen by The Independent, the senior Conservative minister claimed the OBR's projections were having a 'chilling effect' on investment decisions and suggested the body should focus more on potential growth opportunities.
'Pessimistic' projections under fire
The intervention comes amid growing tensions between ministers and independent economic institutions, with Badenoch arguing that constant predictions of sluggish growth become 'self-fulfilling prophecies'.
'There appears to be a consistently pessimistic approach to forecasting that doesn't adequately account for upside potential,' Badenoch wrote in her letter to OBR chair Richard Hughes.
Defending government economic strategy
The Business Secretary's remarks are seen as part of a broader effort to defend the government's economic strategy ahead of the next general election, with ministers keen to highlight positive indicators like falling inflation.
However, economists have warned that dismissing independent analysis risks undermining the credibility of UK economic policy at a time when markets are particularly sensitive to fiscal responsibility.
OBR's role in UK fiscal policy
The OBR was established in 2010 to provide independent scrutiny of the government's fiscal plans and economic forecasts. Its assessments have frequently clashed with ministerial optimism, particularly regarding long-term growth prospects.
Whitehall sources suggest Badenoch's intervention reflects growing frustration in government circles about the challenge of delivering optimistic economic messages while independent forecasts remain cautious.
