The independent Office for Budget Responsibility (OBR) has announced that its latest Forecast Evaluation Report (FER) 2026 will be published on Tuesday, 2 June at 11am. This crucial report is designed to provide a detailed assessment of how the OBR's economic and fiscal forecasts have performed when compared to actual outturn data, offering valuable insights into the accuracy of its predictions.
The upcoming FER will concentrate specifically on the OBR's forecasts from July 2020, March 2023, and March 2024. These past projections will be rigorously evaluated against the subsequent real-world economic and fiscal data for the financial year 2024-25. The aim is to understand where the forecasts were accurate, where they deviated, and the potential reasons behind any discrepancies.
The OBR, established in 2010, plays a vital role in the UK's economic governance by providing independent forecasts for the economy and public finances. Its reports underpin the government's fiscal policy decisions, including the setting of budgets and spending plans. The regular evaluation of its own forecasts through reports like the FER is a cornerstone of its commitment to transparency and continuous improvement.
Understanding the accuracy of these forecasts is paramount for policymakers and the public alike. Economic predictions are inherently challenging, especially given unforeseen global events and domestic policy shifts. The FER provides a mechanism for the OBR to learn from its past performance, refining its models and methodologies to enhance the reliability of future forecasts, which are critical for the Chancellor of the Exchequer's fiscal statements.
The findings of this report could influence how future government spending and taxation plans are framed. If the OBR identifies significant or consistent biases in its forecasts, it could lead to adjustments in how the Treasury interprets and uses these projections when formulating its fiscal strategy. For instance, an overestimation of tax revenues or an underestimation of public spending could have significant implications for the national debt and the government's ability to meet its fiscal rules.