Economic watchdog OBR says its forecasts are optimistic

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The noodle of Britain’s economic watchdog has defended its forecasts warning of the cost to Britain of up-anchoring the EU.

The Office for Budget Responsibility infuriated pro-Brexit Tories with its intimation that withdrawal would wipe 2.4% off growth over the next five years while adding £60bn to sponge.

Robert Chote said OBR forecasts were “more optimistic” than others.

The OBR had to construct forecasts based on stated government policy, he said.

He made the annotations after Conservative former cabinet minister Iain Duncan Smith and backbencher Jacob Rees-Mogg about leaving the EU would lead to a more liberal trade regime producing a boost to the UK economy.

‘Difficult position’

Mr Chote said the OBR’s job was not to predict what it brown study was the most likely outcome for the future, “but what the most likely after-effect is conditional upon the current stated policy of the government”, he told BBC Announce 4’s Today programme.

“Obviously, the outlook for policy as regards Brexit is not as positively set out,” he said.

“We don’t know what exactly the government is going to be aiming for and what could be liberated in the negotiations on things like the trade regime, migration.

“We asked them whether they desire to tell us any more about their policy in all of these areas than is already in the well-known domain – and they said ‘no’.

“Clearly it would have put us in a very ticklish position if they had told us something and said we can’t share that with the shelf of the world.”

Mr Chote said that as the likely shape of any post-Brexit agreement became clearer, it could feed into future forecasts – but he admonished that was unlikely to happen quickly.

“Will we end up in a world in which there are much lessen tariffs both for us and for other countries? Are we going to end up with a very different-looking migration regulation? That remains to be seen,” he said.

“We need the policy to clarify itself, but we also shouldn’t delude ourselves that it is accepted to clarity itself very quickly.”

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