The OBR vs reality

February 27, 2013 10:46 am

The Office for Budget Responsibility (OBR) was set up by George Osborne to provide estimates of economic performance without the interference of the Treasury. Today as the final figures for 2012 are released by the Office for National Statistics, we can compare how the OBR estimates compare with what Osborne has delivered in reality.

Lets take growth in 2012 for example. Growth is estimated to have been 0.3% across 2012 – yet in 2010 the OBR predicted a whopping 2.8% growth:

obrvsreality1

And how about business investment in 2012? The OBR originally estimated that would be 10% – yet it’s actually just 0.4%:

obrvsreality2

Of course circumstances change and economic forecasts are often wrong – but the problem is that these forecasts are what the government’s entire economic strategy was based on. And when it proved to be wrong – Osborne carried on with Plan A anyway…

(h/t: Duncan Weldon for the stats)

  • postageincluded

    What’s more, the errors that the OBR makes seem always to be errors that flatter the government.

    Chote came to the OBR from the Institute for Fiscal Studies, which despite its claims to independence, consistently recommends tax changes that benefit the rich at the expense of the poor. Its pretty clear that his economic theory is one designed to promote Tory policy rather than provide independent advice. As always the Tories have surrounded themselves with yes-men who will tell them what they want to hear. The only surprise is how quickly they did it.

  • Monkey_Bach

    Never in the field of economic forecasting has so much been miscalculated about so many things by so few…

  • BenM_Kent

    “And when it proved to be wrong – Osborne carried on with Plan A anyway…”

    You didn’t think Osborne’s strategy had anything to do with reducing the deficit did you? Naive!

    Even today Tories around the web are belching out their small state mantras as if the disasters in the past 6 years brought on by their economics hadn’t happened.

    It’s the ideology, stupid.

  • Dave Postles

    Irresponsible budgies, the lot of them. The canaries in the Treasury provide the data and the budgies just accept the data.

  • TomFairfax

    Don’t forget the first head of the ‘independent’ OBR left after they issued forecasts that didn’t aid the government’s case, but were a damn site closer to reality. Hardly surprising that ever since the OBR is nothing more than the propaganda wing of the Treasury. For instance scorn was poured on the OBR predictions for the 4G auction when they made them last year by industry watchers, but somehow the government chose the OBR figures rather than the accurate figures being discussed by those who knew the telecoms industry. Labour should propose to scrap the OBR unless they stop the charade and actually start publishing information that isn’t disproved almost immediately, and actually warrants the cost of the organisation. I’m sure I and most LL commentators could forecast to the same level of inaccuracy at a fraction of the cost, even though it’s a challenge to be that wrong so consistently.

Latest

  • Featured Axelrod – that’s what I call a reality check

    Axelrod – that’s what I call a reality check

    “It will be me.” That was Hillary Clinton, at the end of November 2007, expressing her confidence to CBS’s Katie Couric that the Democratic Party’s nomination for President was as good as hers. Hillary was the “inevitable” candidate for 2008. The race was going to be over very soon. Nobody stood a chance against her. And almost everyone agreed. The fact that history turned out differently tells you at least two different things. First, that the Obama campaign (for the […]

    Read more →
  • Featured Is the Labour Party campaigning hard enough for the European elections?

    Is the Labour Party campaigning hard enough for the European elections?

    In a week that supposedly signalled an end of the Cost of Living Crisis as wages begin to rise faster than inflation, Ed Miliband and Ed Balls will feel vindicated to learn that as far as LabourList readers are concerned, at least, it’s not over yet. An overwhelming 94% of those who responded to our survey this week believe the Cost of Living Crisis continues. That will certainly give new strategist David Axelrod something to work with, if activists are convinced […]

    Read more →
  • News Anyone for an Easter (Cl)Egg?

    Anyone for an Easter (Cl)Egg?

    The Mirror today have a story about a Labour attack on Nick Clegg – a chocolate “Easter Clegg”. It’s ‘completely hollow, melts under pressure and leaves bad taste in mouth”. The box also contains a “free mug”. Here’s a photo: Seemingly the Easter Clegg is “100% Authentically Conservative” and should be stored in David Cameron’s pocket. Meanwhile, both The Sun and The Telegraph claim this morning that Miliband would be happy to appoint Nick Clegg as Deputy PM in the event […]

    Read more →
  • News Ed Miliband’s Easter Message

    Ed Miliband’s Easter Message

    Here’s Ed Miliband’s Easter Message – touching on his recent trip to the Holy Land, and the work Christians do in their communities across Britain: “As Christians across Great Britain and the rest of the world gather to celebrate the most important event in the Christian faith, I would like to wish you all a happy Easter. “It was a privilege for me to visit the Holy Land in the lead up to Easter this year. I will be thinking […]

    Read more →
  • Comment UKIP’s attitude to accountability should worry us all

    UKIP’s attitude to accountability should worry us all

    UKIP’s reaction to the allegations over the use of the party’s EU funding has been telling. It tells us that they are not yet ready to take the step up from a being an assortment of oddballs and cranks to a serious political party. After The Times ran their front page on Tuesday, UKIP’s immediate reaction was to denounce the paper as a mouthpiece for the establishment, rather than bother to refute what they felt was incorrect about the article. […]

    Read more →