OBR to Shift Budget Rule Checks to Annual Review

Britain's Office for Budget Responsibility (OBR) will now check annually, instead of biannually, whether the government meets its budget rules. This move aligns with the IMF's recommendation to assess fiscal rule progress annually to reduce speculation. The OBR will still release two forecasts yearly for fiscal statements.

In a shift recommended by the International Monetary Fund, Britain's Office for Budget Responsibility (OBR) announced it will now assess the government's compliance with budget rules annually, rather than twice a year. This change is set to streamline fiscal evaluations, as outlined in an unexpected release ahead of finance minister Rachel Reeves's budget reveal.

The OBR will maintain its practice of issuing two forecasts annually to support the government's spring and autumn fiscal declarations. However, the crucial task of determining if fiscal targets are on track will only occur once a year.

Previously, finance minister Rachel Reeves expressed concerns that two yearly comprehensive forecasts complicated her ability to focus on a single significant fiscal policy event. The IMF advocated for the reduced frequency to lessen speculation about potential measures needed to comply with fiscal rules.

(With inputs from agencies.)