UK budget watchdog warned ex-finance minister Kwarteng about soaring borrowing
By Andy Bruce
LONDON (Reuters) — Britain's former finance minister Kwasi Kwarteng held back official warnings that borrowing was on course to rocket even before he attempted his ill-fated budget plans, new documents from the Office for Budget Responsibility (OBR) show.
Kwarteng's Growth Plan published on Sept. 23 formed the biggest package of tax cuts in decades and triggered a meltdown in British financial markets, exacerbated by the structure of pension funds.
Even before he published the so-called «mini-budget», Kwarteng had been widely criticised for failing to publish advice given to him by the OBR, something that unnerved investors.
The OBR, the country's official forecaster, published that advice this week, in response to an order from the Information Commissioners' Office.
Dated Sept. 5, the report showed borrowing from 2022/23 through 2026/27 was cumulatively on track to rise by 109 billion pounds ($141 billion) more than the OBR had forecast in March 2022, reflecting higher energy costs and rising inflation.
The forecasts — made faster and with less data at hand than for a normal budget event — were given to Kwarteng on a «pre-measures» basis, meaning the OBR had not considered his plans for sweeping tax cuts.
Kwarteng's offices and the Treasury did not immediately respond to requests for comment.
At the time of the mini-budget, a spokeswoman for then-prime minister Liz Truss said providing accelerated OBR forecasts that reflected the proposed tax changes would have compromised their quality and completeness.
Kwarteng and Truss lost their jobs as a result of the mini-budget, which ended the Conservative Party's unbroken 15-year lead over the opposition Labour Party for economic competency in the eyes of voters,
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