Chancellor Rachel Reeves is confronting renewed demands to resign after Britain's independent fiscal watchdog launched a robust defence of its conduct, exposing a series of damaging leaks from within the Treasury in the chaotic run-up to the Budget.
Watchdog Sets Record Straight on Forecasts
The Office for Budget Responsibility (OBR) stated it needed to 'set the record straight' following a war of words with the Treasury. Professor David Miles, a senior member of the OBR's Budget Responsibility Committee, told MPs that press leaks from the Treasury had falsely suggested its economic forecasts were 'fluctuating wildly' ahead of potential tax rises.
He confirmed the OBR had sent its final forecast to the Chancellor on October 31, which showed the government was on course to meet its fiscal rules by £4.2 billion. Despite this, just four days later on November 4, Ms Reeves held an emergency Downing Street press conference, suggesting the fiscal situation was so dire it could force her to break Labour's manifesto pledges and raise income tax.
Leaks Fuel 'Damaging Misconceptions'
The controversial plan to raise income tax was abandoned within days following a political backlash. Subsequently, Treasury briefings to reporters on November 14 claimed the Chancellor had received an 'improved fiscal forecast' from the OBR, allowing her to avoid the move.
Professor Miles forcefully rejected this narrative. 'There seemed to be a misconception that there had been some good news,' he said. 'I don't know where that came from. It didn't exist. It was not true that the OBR had found some money 'behind the back of the sofa'.' He argued the string of Budget leaks had created wrong and damaging misconceptions about the public finances, exacerbating economic uncertainty.
Resignation and Mounting Political Pressure
The clash comes just days after OBR Chairman Richard Hughes was forced to resign on Monday. His departure followed a catastrophic IT error that led to the watchdog's market-sensitive analysis being leaked online a full half-hour before Ms Reeves delivered her Budget speech in the Commons.
Shadow Chancellor Sir Mel Stride told the Daily Mail the revelations proved Ms Reeves' position was now 'untenable'. 'She misled the country to justify her endless tax raids and welfare splurges,' he said. 'Reeves has lost the trust of Parliament, and lost the trust of the public. Her position is untenable, and if she won't resign, Keir Starmer must move her on.'
Professor Miles insisted the OBR was not 'at war' with the Treasury and acknowledged it was not unreasonable for the Chancellor to highlight a difficult financial position. However, he stressed the leaks had harmed both the OBR's reputation and the economy, stating their impact on growth, while hard to quantify, was negative.
