The shock resignation came for a very specific reason – the early release of Budget information – but the saga surrounding the Office for Budget Responsibility (OBR) will continue with a series of decisions the chancellor will have to make over Richard Hughes’s replacement.Firstly, Rachel Reeves will have to find a respected and credible economist to run the OBR. There are several candidates who might fit the mould of fiercely independent bean counters.The list will be carefully watched by the markets for any departure from the normal model. The problem is there is some political pressure to do just that. One of the points of tension was the refusal of Mr Hughes to give credit to the government for “pro-growth” policies. He had said he would not score any policy unless it was material in its impact on the economy. In the event, none reached the 0.1% of national income threshold.It is a careful balancing act, however. Any perceived interference with the OBR’s independence could affect market credibility too, and, for example, raise UK government borrowing costs.When I saw the now-departing chairman on the evening of the Budget last week, he was clearly mortified by the responsibility of his organisation for the early release of Budget information. While it is no surprise to me that Mr Hughes took the honourable decision to resign for an error identified as the fault of a junior member of staff, it was not the only issue vexing him.He was a fierce defender of the independence of his organisation from political and ministerial pressure – fro …
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[mwai_chat context=”Let’s have a discussion about this article:nnThe shock resignation came for a very specific reason – the early release of Budget information – but the saga surrounding the Office for Budget Responsibility (OBR) will continue with a series of decisions the chancellor will have to make over Richard Hughes’s replacement.Firstly, Rachel Reeves will have to find a respected and credible economist to run the OBR. There are several candidates who might fit the mould of fiercely independent bean counters.The list will be carefully watched by the markets for any departure from the normal model. The problem is there is some political pressure to do just that. One of the points of tension was the refusal of Mr Hughes to give credit to the government for “pro-growth” policies. He had said he would not score any policy unless it was material in its impact on the economy. In the event, none reached the 0.1% of national income threshold.It is a careful balancing act, however. Any perceived interference with the OBR’s independence could affect market credibility too, and, for example, raise UK government borrowing costs.When I saw the now-departing chairman on the evening of the Budget last week, he was clearly mortified by the responsibility of his organisation for the early release of Budget information. While it is no surprise to me that Mr Hughes took the honourable decision to resign for an error identified as the fault of a junior member of staff, it was not the only issue vexing him.He was a fierce defender of the independence of his organisation from political and ministerial pressure – fro …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]
