New public sector borrowing figures from the ONS make grim reading ahead of the budget. It’s at the third-highest September level since records began and at its highest since the pandemic…

The state has borrowed £6.7 billion more than the OBR forecast so far this financial year, and £1.2 billion more than a year ago this month. The ONS says spending is to blame despite record revenue from growth-killing taxes:

“While tax revenue increased, this was outweighed by increased spending, partly due to higher debt interest and public sector pay rises.”

Chief Treasury Secretary Darren Jones has issued the old line blaming the Tories for having “no plan to fund pay deals for millions of public sector workers. Strikes cost at least £3bn last year, so it was the right thing to do to end those damaging disputes.” At this rate Reeves might have to invent yet another black hole before the budget…

The government borrowed £2.9 billion more than expected last month, a blow to Labour’s Rachel Reeves as she prepares her first budget. According to the Office for National Statistics, the government borrowed £14.5 billion in June, £3.2 billion less than last year, though well above the £11.6 billion the Office for Budget Responsibility predicted. No surprise that the quango got it wrong again…

Meanwhile, the government has borrowed £49.8 billion since the fiscal year began. Though the UK is at the top of the G7 growth table for the first quarter (GDP growth was 0.7%), the debt-to-GDP ratio hit 99.5% in June. Labour are inclined to raise taxes, overshooting OBR forecasts will only spur them on…

The Growth Commission have come out swinging against the Office for Budget Responsibility (OBR) as its forecast ahead of the budget, which, as usual, predicts a limited “headroom” for the Chancellor. Foretelling doom and gloom results in a tightened Treasury and squeezed taxpayers’ wallets…

The group has come out with an alternative forecast. If public sector productivity is brought back to pre-Covid levels, they project £60 billion of headroom over 4 years. Douglas McWilliams, co-chairman of the Growth Commission, tells Guido:

“OBR has claimed that the big rise in public spending caused by the loss in productivity is baked in, we reject that notion and we also believe it’s not the OBR’s role to make that kind of judgement on policy matter in public. Their forecasts haven’t been brilliant, we do not think its the case that we should assume high spending . It is not their role as a non-partisan body to get involved in political decision making.”

The Chancellor should just look back at Guido’s continued coverage of the OBR’s credibility deficit. A reminder: the sum total of growth misjudgements in the OBR’s one-year budget forecasts is £558 billion between 2010 and 2023. Even the OBR’s chairman Richard Hughes recently came out conceding their forecasts are a “work of fiction”. And that’s not the first time they’ve admitted their numbers – which lead to the beancounters taking more money off your paycheque – are wrong…

When the OBR predict tax cuts will “cost” too much, it’s no wonder our economy is stalling. If the Tories truly want to promote growth, they’ll need to get rid of their own creation… 

The Office for National Statistics have released figures this morning showing the government borrowed £96.6 billion in the last 10 months, £9.2 billion less than the OBR forecast. No surprise that the OBR got it wrong…

Hunt is talking about ‘headroom’ again and indulging in public expectations management. Hunt’s attitude to tax cuts seems to be fickle, one minute he feels the tax burden is “unfair” now he’s saying there’s nothing he can do about it, and we can’t afford tax cuts. What voters can’t afford are high taxes.

Speaking on the Peston show last night, Hunt said he won’t “have the kind of room that I had for those very big tax cuts in the autumn.” This comes after the Office for Budget Responsibility handed the government its first round of estimates, which is said to have given Hunt headroom of £14 billion – less than half the £35 billion headroom they said he had in Autumn. That seems a suspiciously volatile forecast from the progressive economists that pack the OBR, just last week the OBR chairman admitted reports were a “work of fiction“. The doomsayers from the OBR lead to a tightened grip on high taxes, which leads to lower growth. Guido will tell his readers what he’s said before: Trusting a forecaster that consistently misses the mark by £53 billion every year on UK public sector net borrowing isn’t the smartest budget move. The Tories are flatlining in the polls and are unloved even by their natural supporters. Twiddling with taxes won’t work. Radical tax cuts are needed to revive support.