Treasury refuses to publish UK economic forecast

The Treasury is refusing to publish a forecast of the UK's economic outlook alongside this Friday's mini-Budget.

Independent forecaster the Office for the Budget Responsibility (OBR) has already provided a draft to Chancellor Kwasi Kwarteng, the BBC understands.

However, it does not include the impact of the recently announced energy bill help, capping a typical bill at £2,500.

The OBR has offered to provide a forecast including the impact of the help, but that has been rejected.

The fact the offer has not been taken up is raising some concerns about whether tax and spending policy is "flying blind", given predictions that the UK is facing a lengthy recession.

The Treasury Committee wrote to the chancellor on Tuesday seeking assurance that an OBR forecast would accompany the mini-Budget.

The committee's chairman, Mel Stride, said it was "vital" a forecast was published on Friday.

"These forecasts are a vital indicator of the health of the nation's finances, and provide reassurance and confidence to international markets and investors," he said.

The OBR is obliged to produce economic forecasts twice a year, usually accompanying the Autumn Budget and Spring Statement.

On Friday, there will be no independent assessment about whether permanent tax cuts and some one-off spending increases are consistent with the government's Budget rules.

The lack of OBR forecast also means it will not cast judgement on the impact of the new tax measures on growth - a key target for the government which wants to increase the trend rate of growth to 2.5%.

In its latest long-term forecast in July, the OBR said trend growth had fallen from 2.2% to 1.4%, partly because of a declining size of the workforce.

In the City, where in recent weeks the value of the pound sterling has fallen and the cost of borrowing for the UK government has risen, there is some expectation that the Treasury will imminently have to formally increase its "remit" for borrowing.

The Financing Remit is given to the Debt Management Office based on a forecast for borrowing. Extra sales of government loans, known as gilts, also need to be co-ordinated with the Bank of England, which is planning to sell off some of the gilts it owns, as it starts to reverse its long-running programme of stimulus.

Government insiders say that the main motivation behind Friday's announcements is to enact the PM's leadership campaign promises as quickly as possible, and that a full forecast will accompany an upcoming Budget statement.

The cost of the energy package, for example, could vary considerably depending on market prices for gas, and the ability of the government to renegotiate expensive contracts for renewable energy.