OBR's first report slammed as implausible
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The first report of the Office of Budget Responsibility has been criticised for being “implausible” by the Centre of Economic and Business Research.
Despite the OBR’s independence the CEBR slammed the report as overreliant on Treasury officials and for having projections well above the general consensus.
The CEBR says: “The new forecasts remain well above the consensus of independent forecasts and even more so above our own views.
“Sadly, in the rush to set things up quickly, the chancellor has relied too much on former Treasury officials and simply moved the forecasters from the Treasury to the new Office.
It claims Alistair Darling should be “dancing a jig” as it proves he was right all along but the CEBR do not accept the findings.
Meanwhile, the National Institute for Economic and Social Research praised the detail and reasoning given in the OBR’s first report.
But it added: The most striking point about the forecast is that it shows cuts to government consumption delayed, as compared to what the previous government had assumed.
“The NIESR’s view remains that we expect growth to be somewhat slower than the OBR has forecast with the consequence that the budget deficit is likely to be up to about 11 per cent of GDP higher by 2014-5 than OBR has forecast. But all forecasters recognise that there are substantial margins of error.”
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