Office for Budget Responsibility (OBR)

What is the OBR? 

The Office for Budget Responsibility (OBR) is the UK’s official independent economic and fiscal forecaster. The OBR provides forecasts on how economic measures (like GDP and inflation) and fiscal measures (like tax and spending) will change in the future, and independent scrutiny of the performance of the government against its fiscal rules.  

The OBR’s forecasts are typically used as the basis for the government’s fiscal policy decisions – the Treasury does not produce its own forecasts. However, the chancellor is not obliged to accept the OBR’s forecasts and can choose to base policy on different assumptions about the future path of the economy and public finances.  

Why was the OBR created? 

The OBR was set up in 2010 as a fulfilment of a Conservative manifesto pledge. ²⁵ https://general-election-2010.co.uk/2010-general-election-manifestos/Conservative-Party-Manifesto-2010.pdf, p.7.  Before the OBR’s creation, the Treasury produced its own economic and fiscal forecasts for budgets and spending reviews. These forecasts were signed off by the chancellor. This put the Treasury at risk of political manipulation, to forecast higher rates of economic growth and stronger growth in tax revenues. Indeed, Treasury forecasts were consistently over-optimistic and Andy King, a former member of the OBR’s Budget Responsibility Committee (BRC) has described its forecasting as a guard against ‘politically motivated wishful thinking’. ²⁶ https://ifs.org.uk/articles/how-important-obr-forecast  

What are the responsibilities of the OBR? 

The OBR’s current main tasks are: 

• Producing, at least twice every fiscal year, at the request of the chancellor, a forecast for the economy and public finances covering at least the next five financial years. This is its Economic and Fiscal Outlook. ³⁴ https://obr.uk/efo/economic-and-fiscal-outlook-october-2024/
• Evaluating the government’s performance against the fiscal targets the government sets itself at each forecast period.  
• Assessing, at least twice every two years, the long-term sustainability of public finances and evaluating fiscal risks from the economy and the financial system. This is currently done through the Fiscal Risks and Sustainability report. ³⁵ https://obr.uk/frs/fiscal-risks-and-sustainability-september-2024/
• Scrutinising the government’s tax policy costings at each budget.
• Producing a welfare trends report, at least once a year, to examine the drivers of welfare spending.
• Producing a forecast evaluation report, at least once a year, to assess the accuracy of previous OBR forecasts.
• The above responsibilities are UK-wide. Regarding the devolved administrations, the OBR is responsible for producing forecasts for taxes for the Welsh and Scottish governments. 

How is the OBR structured? 

The OBR is led by the three-member Budget Responsibility Committee (BRC) who sign-off the semi-annual economic and fiscal forecasts, as well as the other reports mentioned above. The term length of appointed BRC members is usually 5 years, once their term is over, they may be reappointed. ³⁶ https://publications.parliament.uk/pa/cm201617/cmselect/cmtreasy/642/64207.htm  Former chair, Richard Hughes, resigned on 1 December 2025, following the accidental early release of the OBR’s publication to accompany the autumn budget 2025. The committee is supported by a permanent staff of around 50 officials.  

New members of the Budget Responsibility Committee are appointed by the chancellor, but these appointments (and any dismissal) can be vetoed by the Treasury Select Committee. ³⁷ https://researchbriefings.files.parliament.uk/documents/SN05657/SN05657.pdf  These are the only appointments over which the Treasury Select Committee has veto power, making this an unusual additional layer of protection for the OBR’s independence.  

There are also two non-executive directors who sit on the OBR’s oversight board alongside the three members of the Budget Responsibility Committee. In the OBR’s own words, the oversight board is responsible for ensuring “effective arrangements are in place to provide assurance on risk management, governance and internal control”. ³⁸ https://obr.uk/faq/how-is-the-obr-structured/   

The OBR also has an advisory panel consisting of 26 economic and fiscal experts drawn from academia, the private sector, and think tanks. They provide technical scrutiny of the OBR’s research programme and methods. ³⁹ https://obr.uk/about-the-obr/who-we-are/

The OBR is a non-departmental public body that is accountable to both parliament and the chancellor and therefore lays its reports before parliament. The BRC are expected to appear before the Treasury Select Committee about the decisions behind OBR forecasts, helping parliament hold the government to account for its fiscal policies. As the OBR is a statutory body, it would require primary legislation to abolish it. ⁴⁰ https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/784039/OBR_HMT_framework_document_2019_update_web.pdf

Can the government announce major fiscal policy changes without an OBR forecast?  

In September 2022, the OBR indicated that it was ready to provide a forecast to accompany Kwasi Kwarteng’s ‘mini-budget’, but the chancellor did not ask the OBR for one, and so the fiscal event went ahead without forecasts. The Institute for Government strongly criticised the government for proceeding with such a large package of tax cuts and other measures without an OBR forecast, arguing that this undermined the credibility of the UK’s economic institutions and policy-making process.   

An amendment to the 2011 Budget Responsibility and National Audit Act, made by Rachel Reeves shortly after she became chancellor, will prevent such a scenario in the future. The amendment, which came into force on 15 October 2024, is designed to ensure that any “fiscally significant” measure, or combination of measures, would be accompanied by an assessment by the OBR, even if the chancellor did not directly commission such an assessment. ⁴³ HM Government, ‘Budget Responsibility Act 2024’, HM Government, (no date) retrieved 1 December 2025, www.legislation.gov.uk/ukpga/2024/24/enacted  There is an exception for measures that are both temporary and in response to an emergency. 

How successful has the OBR been at fulfilling its responsibilities? 

The OBR has generally been viewed as a successful innovation and has enhanced the credibility of the UK’s economic and fiscal forecasting. The OBR gained praise from the International Monetary Fund, which stated that OBR analysis “can be considered as best-practice, and could be used as a benchmark by other advanced countries”. Despite periods of extreme turbulence in the global economy since 2010, the OBR’s forecast errors have been smaller on average than the Treasury’s in the decade before. ⁴⁴ https://obr.uk/docs/dlm_uploads/Forecast_evaluation_report_December_2019-1.pdf  However, as the OBR acknowledges in its own forecast evaluation reports, the difference between its central forecasts and outturn can still be very significant. In particular, it has persistently overestimated productivity growth since 2010. The OBR reduced its forecasts for productivity growth in both 2017 and 2025, following prolonged periods in which productivity growth failed to rebound in the way it had expected. 

The Budget Responsibility and National Audit Act 2011 requires that there should be a formal review of the OBR every five years. The third and most recent external review of the OBR was led by Laura van Geest, former head of the Netherlands Bureau of Economic Policy Analysis (CPB), and published in 2025. The review found that the OBR had ‘successfully navigated a series of unprecedented economic and fiscal challenges’ since its last external review in 2020, and has broadened and deepened its credibility.