Coffee House Shots The OBR on the Budget leak & why they're always wrong
Nov 27, 2025
Tim Shipman talks with David Miles, a Professor of Economics at Imperial College London and OBR committee member. They dive into the recent Budget leak and what it means for the UK's growth and productivity forecasts, revealing why conditions appear bleaker than expected. David clarifies the implications of delayed tax rises and explores why the UK struggles to adopt its own innovations. They also discuss the political motivations behind fiscal choices and the OBR’s approach to scoring proposed reforms amidst uncertainty.
AI Snips
Chapters
Transcript
Episode notes
Headroom Eroded By Productivity Downgrade
- The OBR's pre-measures forecast showed the government's small spring headroom had almost vanished.
- Miles said lower productivity and other moving parts largely erased the roughly £10bn buffer since March.
£22bn Margin Offers Limited Security
- The Chancellor restored about £22bn of headroom but OBR judges that's only about a 60% chance of meeting the target if policy stays unchanged.
- Miles stressed that with time and future budgets the government can still adjust course if needed.
Timing Matters Less Than The Four‑Year Endpoint
- The Budget frontloads spending and backloads tax rises, raising early borrowing and late-year revenues.
- Miles noted fiscal rules care about the position four years ahead, so timing can be shifted if the endpoint meets targets.