Over in just 45 minutes: budget watchdog leave emergency talks at No11 as they prepare forecast next week
30 September 2022, 11:09 | Updated: 30 September 2022, 11:46
Prime Minister Liz Truss and Chancellor Kwasi Kwarteng are expected to release the UK's financial forecast within days.
The emergency meeting between the head of Britain's independent financial forecaster and PM this morning lasted less than 50 minutes.
A statement released after said: We discussed the economic and fiscal outlook, and the forecast we are preparing for the Chancellor's medium-term fiscal plan.
"We will deliver the first iteration of that forecast to the Chancellor on Friday October 7 and will set out the full timetable up to November 23 next week.
"The forecast will, as always, be based on our independent judgment about economic and fiscal prospects, and the impact of the Government's policies."
The meeting comes day after a market turmoil sparked by their mini-budget.
The PM and Chancellor were warned they face ‘a very difficult conversation’ with the Office for Budget Responsibility ahead of the emergency talks.
The OBR is to demand a ‘rethink’ of their plans for a massive tax shake-up according to a senior Conservative.
Mel Stride, chairman of the Treasury committee, said: “You cannot come forward with multiple billions of tax cuts in a high inflationary environment with a very tight labour market and expect that, along with various supply-side changes to develop the growth, that’s going to pay for those tax cuts. “There needs to be a rethink.”
Ms Truss and Mr Kwarteng will talk to the head of the Office of Budget Responsibility after defending their mini-budget plans yesterday.
There was no report from the OBR when the economic plans were set out, adding to market jitters over the plans, which led to a slump in the value of the pound, mortgage deals being pulled off the market, and a £65bn intervention from the Bank of England to avert a pensions crisis.
It comes as an influential cross-party group of MPs said the Chancellor should bring forward his next "fiscal event" and economic forecast after the market fallout from his mini-budget.
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The Treasury Select Committee, chaired by an influential Tory MP, said Mr Kwarteng should reveal his medium-term fiscal plan at the end of October, instead of November 23 as currently planned.
The Office for Budget Responsibility was not asked to produce its usual forecasts at the mini-budget last Friday, but it will for the November event.
Experts said the market collapse in recent days was partially caused by the lack of a forecast from the OBR. The committee had called for a forecast.
In a letter to the committee, the OBR said it would present its initial forecast to the Chancellor on October 7, and it could have the full forecast ready weeks later.
The MPs said: "The committee argues the fiscal event and OBR forecast planned for November 23 should be brought forward given 'continued uncertainty within markets', that it would benefit a key meeting of the Monetary Policy Committee on November 3, and because a meaningful OBR forecast can be provided earlier."
Committee chairman Mel Stride said it is "critical" that the economic analysis is brought forward.
"Urgent need now to increase confidence of markets that HM Treasury Kwasi Kwarteng fiscal plans stack up," the Conservative MP tweeted.
"It is critical that OBR forecast and Chancellor's statement are brought forward to end October or earlier.
"Critical point also is that the Bank of England's Monetary Policy Committee (which sets interest rates) meets on November 3 to decide on next moves in base rate which will impact millions.
"Not acceptable that they should be expected to take this huge decision without an OBR forecast when we know this can be provided before they meet."
