Treasury fears UK watchdog will give it little credit for pro-growth reforms

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Chancellor Rachel Reeves does not expect to obtain credit from the UK Financial Supervision Authority for her attempts to enhance growth when she publishes her official forecast next month.
Reeves has been settled to reduce the acute degree in the responsibility office of the responsibility, which would give a hole in its financial plans and force it to bridge the gap with billions of discounts in spending or high new taxes.
Those familiar with the Treasury fear that OBR will not take into account few repairs on the side of the offer announced by the advisor in recent weeks in areas such as planning, pensions, or infrastructure, such as the Heathro III runway.
“We are completely confident that we are doing the right thing and that these things will create growth – it’s only OBR will not record it.”
The Sir Kerr Starmer government has identified growth as a top priority for it, so OBR’s expectations will be possible to accompany the Rabie Rivers Spring statement on March 26 – politically painful.
Reeves fell to red against its main financial rule, to achieve balance in the budget by 2029-30, as the high borrowing costs and poor growth put pressure on public financial resources, according to people familiar with OBR initial expectations.
The numbers mean that the chancellor will need to collect more than 10 billion pounds if she wants to restore the financial preparation room that she had at the time of October budget. Some analysts argue that they need to exceed this matter because they seek to secure credibility with financial markets.
The officials indicated that the consultant will seek to reduce spending instead of raising taxes, for example Success in social welfare budget.
On Wednesday, James Bolller, the permanent treasury secretary, launched an investigation into what he said was a “possible leakage” to present the OBR, which Bloomberg was first reported, saying it was very important for the treasury and treasury ministers to discuss the predictions “unilaterally.”
Reeves allies admit that it is difficult to persuade OBR to “recording” positively its offerings, with the International Energy Agency’s preference to wait to see if it is already happening and the results.
“It requires a lot of evidence about the impact of new policies before they wanted to increase their growth expectations.”
“The first time they did this for the advisor, the reforms of child care were in 2023, but until then it was less generous than we were hoping.”
“OBR has very difficult criteria for registering the effects of growth – which must be large, proven and occur within five years. The most anxious, must be additional clearly what is actually implicit In prediction.
Reeves insists that it does the right thing to repair areas such as pensions and planning, which facilitates the construction of new housing and infrastructure projects such as nuclear power plants.
“We always knew that this would be difficult,” said one of the assistants. “The short -term challenges are real and present, but everyone we talk to is actually very confident.”
“As the Bank of England expects low growth and high inflation, it is clear that this consultant needs urgent corrections, before the damage it causes to the economy becomes permanent.”
Economists expect economic pressure to increase on Thursday when GDP data is published in the fourth quarter. The economy is likely to contract by 0.1 percent compared to the previous three period, after that Flat.
England Bank Half its growth estimate for 2025 Last week, he expected the economy to expand by only three quarters of a percentage this year-less than OBR prediction by 2 percent.
Ernt & Young ETEM, another expected, predicted only 1 percent in 2025.
The Bank of England expects 1.5 percent growth in 2026, which is also less than the last OBR prediction by 1.8 percent of growth.
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2025-02-12 18:00:00