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    Hunt and Sunak are to blame for forecasting errors, says OBR chief

    Mr Hughes says mistakes were inevitable as the body was forced to accept the government's spending plans at face value. Photo: Heathcliff O'Malley

    This follows a promise from shadow chancellor Rachel Reeves, who said the OBR would review all major tax and spending decisions if Labor wins the next election.

    However Mr Hughes suggested that even after Ms Truss's rocky tenure as Prime Minister, during which she bypassed OBR scrutiny of her mini-budget, the watchdog was still trying to forecast the outlook for the public finances.

    Mr Hughes told members of the Public Accounts Committee: “When we make our forecast, we have to rely on the state of government policy.”

    “As we all know, there are patterns in government where they say that they are going to do something, and then everyone knows that they are not going to do it. But we have to believe them when they say it.”

    Mr Hughes's remarks come after the Chancellor last month announced £20bn of tax cuts, while outlining equally significant spending cuts in the post-election years.

    Some economists at the time called the plans “implausible,” a view largely shared by Mr. Hughes.

    He said: “Before any spending occurs, the government says that after 2025 we will manage public finances very tightly. Then, when 2025 comes, suddenly there will be more money for health, more money for education.”

    The government tends to set a “pretty tight schedule for spending on public services” before specifying how much each department gets, said head of the supervisory authority.

    Mr Hughes said: “Then when spending reviews are held, at least recently, they throw loads of money into the pot when it comes time to allocate it to health, education, transport and other areas. This is a sum of 20-30 billion pounds. This could cause our medium-term government spending forecasts to be off by up to £20-30 billion.”

    The OBR chief also pointed to fuel duty as a “classic example” of the government changing course. which often led to confusion among weather forecasters.

    Mr Hughes said: “The government says every year that it is going to index [fuel duty] to the RPI [Retail Price Index]. It [then] freezes every year. The Treasury Committee eventually got fed up with this and instructed us to forecast on two different bases – one frozen, one indexed.”

    In its analysis in November, the OBR noted that 43% of Mr Hunt's fiscal budget is a buffer will be eliminated by 2028-2029 if it continues to maintain the frozen fuel duty.

    Mr Hughes also warned that the rising cost of servicing Britain's growing debt was increasingly harming Britain's purchasing power.

    The OBR's latest forecasts show that interest on debt over the next five years will be £115 billion more expensive than previously predicted. The jump was driven by interest rates rising to a 15-year high and inflation proving more resilient than expected.

    Mr Hughes said: “This limits the choices the government has in setting budgets because The more of your financial space is occupied by interest expenses, the less you will have to spend on health care, education and other areas, or the less you can get back through tax cuts if you want.”

    His comments also criticized address “fickle and fickle” foreign buyers of government debt, which he said pose a threat to the stability of the gold market because their actions are harder to predict.

    A Treasury spokesman said: “We are focused on building a more productive public sector , rather than larger ones, by reducing administrative burdens, introducing early intervention and safely implementing new technologies such as artificial intelligence. This will stop the growth of the state and ensure that taxpayers' money is spent on public needs.”

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