Treasury launches inquiry into leak of growth forecasts
Bloomberg has reported that the OBR is set to downgrade its growth forecasts for
the UK. The Treasury official who confirmed the inquiry insisted the existence
of the probe does not confirm the reports were true.
Political reporter
Wednesday 12 February 2025 17:40, UK
A leak inquiry will take place following reports that economic growth forecasts
have been reduced by the government’s financial watchdog.
Bloomberg reported that the Office for Budget Responsibility (OBR) had reduced
its growth forecasts in data sent to Chancellor Rachel Reeves
[https://news.sky.com/topic/rachel-reeves-10866] last week.
Reduced growth could force the government to cut further spending or increase
more taxes.
Politics latest: PM and Badenoch in rare agreement
[https://news.sky.com/story/politics-latest-immigration-labour-starmer-badenoch-farage-live-news-12593360]
The next forecast is set to be published in March – with the process supposed to
remain confidential until that point.
The inquiry was confirmed by James Bowler, the most senior civil servant in the
Treasury.
He told the House of Commons Treasury Committee: “We will undertake an inquiry,
and I’m happy to communicate the outcome of that.”
The government’s attempts to grow the UK economy
[https://news.sky.com/topic/uk-economy-5794] have proved difficult since the
election last year, and businesses have complained about measures introduced in
Ms Reeves’s first budget.
Part of Labour’s plan involves increasing house building and development,
although these plans were not included in the forecasts for last October’s
budget.
Mr Bowler sought to play down the fact that a leak inquiry was happening meant
that what was reported by Bloomberg was true.
Asked by committee chair Meg Hillier about the inquiry, the civil servant
appeared to indicate about 50 people in the Treasury would have been able to see
the forecasts.
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He said an investigation into OBR officials would likely also happen, although
the body is independent of government.
Downing Street has tried to remain bullish about the economic situation.
A Number 10 spokesperson said: “In recent weeks and months, the [Organisation
for Economic Co-operation and Development] and the [International Monetary Fund]
have upgraded our growth forecast over the next three years.”
They added: “The government remains relentlessly focused on growth as the only
way of sustainably raising living standards and delivering the investment that
we need in our public services.”
Read more:
Growth forecasts cut in blow for Reeves
[https://news.sky.com/story/interest-rate-cut-but-economic-growth-forecast-slashed-in-blow-to-chancellor-13304038]
Starmer has growth battle on his hands
[https://news.sky.com/story/starmer-has-a-battle-on-his-hands-but-when-its-green-v-growth-theres-only-one-winner-13304301]
Reeves calls in bank chiefs for growth talks
[https://news.sky.com/story/reeves-calls-in-bank-chiefs-for-growth-talks-13306242]
Both bodies mentioned slightly increased their growth forecasts, but they still
remain below 2%.
Last week, the Bank of England halved its growth expectations for the UK –
saying it would only increase by 0.75% in 2025, before increasing to 1.5% for
the next two years.
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The OBR’s forecasts have a more direct impact, as the Treasury use them to
measure if they are meeting their fiscal rules
[https://news.sky.com/story/budget-2024-what-are-labours-fiscal-rules-and-could-rachel-reeves-change-them-to-raise-more-money-13231424].
GDP figures are set to be published tomorrow, which will show how the UK economy
was performing to the end of 2024.
