OBR? Oh,BS. Oh, beHAVE

Posted on Mar 29, 2023. by NTI

We in the NTI newsroom haven't been at all impressed by the OBR (Office for Budget Responsibility) since, well, the beginning of time. Well, since October 2010, in fact, when the Office was set up as a 'non-departmental public body' to provide independent economic forecasts and independent analysis of the public finances. 

The OBR does report on its website that ..."Year-to-date borrowing of £132.2 billion is up £15.5 billion (13.2 per cent) on last year. But it is only up £6.9 billion (5.9 per cent) on a like-for-like basis (correcting for student loans figures not yet recorded in outturn)." There is no doubt that they are decent at reporting stuff that has already happened (not unlike the Met Office telling us that it rained over our house yesterday), but as for the future? Hmmm. You know, forecasts, predictions, numbers you might be able to hang your hat on if they approximated to anything approaching the distant word 'accurate'. This is where the OBR, becomes the 'Oh, BS' or - as Billy calls them, 'Oh, beHAVE'.

The truth is that the Oh, beHAVE has not produced a perfectly accurate five year prediction in a decade of forecasts. Do you remember Liz Truss and Kwasi Kwarteng? They decided that the Oh, beHAVE was so off the pace they decided to block their forecasts and commentary on the state of health of the UK union. The fact is, though, that the Oh, beHAVE's forecast publications provided information to the UK Government’s creditors (this is, the very financial markets that brought Liz and Kwasi to their knees) on the sustainability of public finances.

The Times published a report this morning (Wednesday 29 March) saying that the economy can avoid a “technical” recession of two consecutive quarters of falling gross domestic product. We got within a kitten's whisker at the end of last year, but expectations are that the economy will avoid slipping into recession in the present quarter. (We wonder what will actually happen? Should we plan for the exact opposite and get a load of loo-rolls in?) Of course, the massive energy shock and cost of living crisis generated by the Ukraine war and the UK has suffered from what economists would describe as a massive and negative “terms of trade” effect from dearer energy.

However, with all of the above, apparently the thing to feel most gloomy about is now interest rates and the price of oranges. Supermarket prices increased at an annual rate of 17.5 per cent in March, leaving the average British household £837 worse off each year, just by feeding themselves and having the occasional yoghurt. About that; the NTI newsroom are starting a new series, 'Making Ends Meet' and we have a tip for you. It seems the cost of eggs, milk and cheese are rising fastest, so if you avoid quiche for a whole month (or 'flan') you should be able to take that dream holiday later in the summer.

Supermarkets are at the sharp end of all the above, spacing their peppers out on shelves to make it appear as if they have stock and coming up with cost-saving initiatives, such as 'Don't feed the kids - get them to make friends with middle class people and to be charming over dinner at their house'. It's an absolute winner (not least because, while they are eating at their mates' homes they can create a distraction and steal an orange). Tesco are bang on; every little does help.

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