OBR error cut £18bn of headroom from Rachel Reeves’ Budget
Your support helps us to tell the storyFrom reproductive rights to climate change to Big Tech, The Independent is on the ground when the story is developing. Whether it’s investigating the financials of Elon Musk’s pro-Trump PAC or producing our latest documentary, ‘The A Word’, which shines a light on the American women fighting for reproductive rights, we know how important it is to parse out the facts from the messaging.At such a critical moment in US history, we need reporters on the ground. Your donation allows us to keep sending journalists to speak to both sides of the story.The Independent is trusted by Americans across the entire political spectrum. And unlike many other quality news outlets, we choose not to lock Americans out of our reporting and analysis with paywalls. We believe quality journalism should be available to everyone, paid for by those who can afford it.Your support makes all the difference.CloseRead moreCloseAn Office for Budget Responsibility (OBR) error has left chancellor Rachel Reeves with £18bn less headroom in her spending plans, potentially fuelling investor concerns about her first budget.A footnote in the watchdog’s outlook, published on Wednesday alongside the Budget, said its earlier forecasts contained an error in the projections for public sector net financial liabilities – the debt measure now used by the chancellor in one of her new fiscal rules.In March, the OBR found the margin in the 2028-29 fiscal year would be £62bn. It has since corrected the figure £43.9bn.The margin, also known as the “headroom”, is the money left over in the budget to spend without breaking fiscal rules.The OBR document said: “An error was identified in the net liabilities calculation used in the March 2024 forecast of PSNFL.“The restated March PSNFL forecast and headroom calculation correct this error but otherwise is unchanged.”Rachel Reeves unveiled her first budget on Wednesday More