OBR expected to flag warning over Healey’s spending pressures
Britain’s fiscal watchdog is likely to sound the alarm on the spending pressures facing the government when it lays out its analysis of the Budget next week, economists have predicted, in what would be a significant move signalling the scale of the challenges facing the Chancellor. John Healey is facing a crunch Spending Review next [...]
The Office for Budget Responsibility (OBR) is expected to raise concerns about the spending pressures faced by the government during its analysis of next year's Budget, according to economists. Chancellor John Healey faces a significant Spending Review in which he aims to raise defence spending to 3% of GDP, potentially costing the government an additional £11bn in annual spending.
While the OBR typically raises concerns at budgets held close to a Spending Review, the government is not expected to comment on speculation surrounding the Budget. The OBR's previous warnings to Chancellor Jeremy Hunt indicated scepticism about spending plans ahead of crucial reviews, where ministers look for ways to fund top-ups across departmental budgets.
This year, the OBR has highlighted technical efficiencies worth nearly £17bn by 2029, which could complicate the Chancellor's efforts to balance the books. Economists predict that the OBR may also express caution over the trajectory of defence spending, welfare, and planned efficiencies up until 2029, as well as the impact of potential tax rises needed to maintain fast-paced spending growth.
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