OBR’s Reeves knew about better forecasts before income tax speech

Friday 28 November 2025 2:57 pm | Updated: Friday 28 November 2025 3:23 pm

Shadow Chancellor Rachel Reeves was aware of improved economic forecasts from the office for Budget Responsibility (OBR) before delivering her keynote speech on Labor’s tax plans, City A.M. can reveal.

Sources close to the OBR confirmed that the independent fiscal watchdog had shared more optimistic projections with Reeves and her team in a briefing ahead of Wednesday’s event.

Though, Reeves chose not to reference the improved outlook in her speech, where she doubled down on Labour’s commitment to a full fiscal lockstep with the next Conservative budget – despite warnings that this would prevent the party from implementing key spending pledges.

The OBR’s updated forecasts, which will be published alongside the Autumn Statement next week, are expected to show a significant enhancement in the UK’s borrowing outlook. This is largely due to falling inflation and a stronger-than-expected labour market.

One source said the OBR briefing with Reeves was “detailed” and “left no doubt” about the more positive economic picture.

“They knew things were looking up,” the source added.”The fact she didn’t mention it in her speech is… captivating.”

The revelation raises questions about Reeves’ decision to maintain a cautious approach to fiscal policy,even as the economic situation improves. Critics argue that Labour is unnecessarily tying its hands by committing to the Tory budget, perhaps sacrificing opportunities to invest in public services.

A Labour source defended Reeves’ position, arguing that the party’s priority is to demonstrate fiscal responsibility and restore economic stability. They also suggested that the OBR’s forecasts are still subject to change and that Labour wants to see the full Autumn Statement before making any firm commitments.

“We have always said we will be fiscally responsible,” the source said. “We need to see the full picture before we can make any decisions about spending.”

Though, the timing of the OBR briefing and reeves’ subsequent speech has fuelled speculation that Labour is deliberately downplaying the improved economic outlook in order to maintain a narrative of austerity and avoid accusations of reckless spending.

OBR’s Reeves knew about better forecasts before income tax speech

The Office for Budget Responsibility (OBR) had access to improved economic forecasts before Shadow Chancellor Rachel Reeves delivered her keynote speech on labour’s tax plans, City A.M. can reveal.

Sources close to the OBR confirmed that the independent fiscal watchdog had revised its outlook upwards before Reeves outlined Labour’s commitment to stick to Tory spending plans and not raise income tax, VAT or National insurance.

This raises questions about whether Reeves was aware of the more optimistic forecasts when she made her pledge, and whether Labour deliberately chose to highlight the improved economic picture to bolster their fiscal credibility.

The OBR is expected to publish its full economic forecasts alongside the Budget next week. However, it had already begun circulating preliminary data to stakeholders in the weeks leading up to Reeves’ speech on Tuesday.

One source said the improved forecasts were “significant” and would likely lead to a more positive outlook for the UK economy.

“The OBR had a better picture of things before Reeves spoke,” the source said. “It’s a matter of public record that they share data with the opposition, but the timing is interesting.”

Labour sources insisted that reeves’ speech was based on the most recent information available to them at the time, and that they had not been given any specific details about the OBR’s revised forecasts.

“Rachel Reeves made a clear and credible commitment to fiscal responsibility,” a Labour spokesperson said. “We are confident that our plans are fully funded and will deliver economic stability.”

However, the revelation is likely to fuel further scrutiny of Labour’s economic policies, and will give the Conservatives ammunition to attack Reeves’ claims of fiscal competence.

The timing of the OBR’s improved forecasts also raises questions about whether the government was aware of the data before Chancellor Jeremy Hunt delivers his Budget next week.

A Treasury spokesperson declined to comment.

Rachel Reeves Accused of ‘Misleading the Country’ Over Public Finances Claims

Rachel Reeves is facing criticism for allegedly “misleading the country” after the chair of the Office for Budget Responsibility (OBR) challenged claims of a black hole in public finances.

In a letter to the chair of the Treasury select committee, OBR chair Richard Hughes explained his “unusual step” to publish the evolution of the watchdog’s economic forecasts. This decision was prompted by an “unusual volume of speculation,” fuelled by numerous briefings from the Treasury.

Hughes stated that as of October 31st, the Chancellor maintained a fiscal buffer of £4.2bn, even accounting for the predicted productivity downgrade.

this revelation contrasts with a speech delivered by Reeves on November 4th outside Downing Street,where she cautioned the public about the “circumstances we are facing” and implied significant financial challenges.

Rachel Reeves and the Budget: A Shifting Narrative

Recent weeks have seen a fluctuating account from Labour’s Shadow Chancellor, rachel Reeves, regarding the financial implications of her party’s spending commitments. Initially, Reeves suggested significant cuts would be necessary to adhere to the existing manifesto, but subsequent economic forecasts painted a different picture.

Initial Claims of Austerity

On november 10th, Reeves indicated that maintaining Labour’s manifesto commitments would necessitate “deep cuts in capital spending.” This statement implied a challenging financial landscape and a potential need for austerity measures if Labour were to win the next general election. Some reports even suggested a potential £20bn shortfall, potentially creating a significant economic challenge.

The OBR Forecast and a Change in Perspective

However, the Office for Budget Responsibility (OBR) released an economic forecast that contradicted Reeves’ earlier assertions. The OBR’s analysis revealed that increased tax receipts – largely driven by inflation – had more than offset a £16bn downgrade. This meant the financial situation was considerably more favorable than initially portrayed.

Government Response and Accusations of Misleading the Public

Following the OBR’s report, a spokesperson for Number 10 defended Reeves, denying any attempt to mislead the public. The situation has sparked debate about the accuracy and clarity of economic messaging from political parties.

Key Takeaways

• Rachel Reeves initially warned of potential deep cuts to capital spending to fund Labour’s manifesto commitments.
• The OBR’s economic forecast indicated a stronger financial position than Reeves initially suggested.
• Increased tax receipts, driven by inflation, covered a significant downgrade in the economic outlook.
• The government defended Reeves against accusations of misleading the public.

This evolving narrative highlights the complexities of economic forecasting and the challenges faced by political parties in communicating financial plans to the public.

Publication Date: 2025/11/29 01:10:59