'It is not the 70s': OBR defends optimistic growth rates

GDP contracts by 1.4% in 2023

The Office for Budget Responsibility (OBR) has defended its more optimistic growth forecasts versus those of the Bank of England, telling MPs they are in line with energy market expectations.

Richard Hughes, chair of the OBR, told the Treasury Committee the projections are linked to inflation forecasts, which rely heavily on a relatively speedy fall in the price of energy. He said: "Energy shocks of the 70s and 80s lasted much longer than markets are predicting this shock will last." Market expectations imply there is a "really substantial fall in energy prices", especially gas prices, starting early in 2023 and "accelerating really sharply" through 2024 and 2025, David Miles, another member of the OBR, told the committee. OBR confirms UK recession and weakest public fi...