Office for Budget Responsibility to Review Economic Forecast Accuracy on 2 June

How accurate are the economic forecasts that help shape government budgets and public spending decisions? Kent residents will get some answers when the Office for Budget Responsibility publishes its annual review on 2 June.

The watchdog’s Forecast Evaluation Report will scrutinise three key predictions made over recent years – from July 2020, March 2023, and March 2024 – comparing them against what actually happened during the 2024-25 financial year.

Why These Numbers Matter

The OBR’s forecasts don’t just sit in Treasury filing cabinets. They directly influence government decisions about tax rates, public spending, and borrowing levels that ripple through to council budgets, NHS funding, and infrastructure investment here in Kent.

For the past 15 years, the OBR has published these annual health checks on its own predictions. The process isn’t just about admitting mistakes – it’s designed to spot patterns and improve future forecasting methods.

Track Record Under the Microscope

Historical data reveals some telling trends. Between 2010 and 2025, the OBR consistently underestimated economic growth in the short term by an average of 0.4 percentage points. But it was overly optimistic about longer-term prospects, overestimating five-year growth by 0.7 percentage points.

The watchdog’s mean forecast error sits at 1.2 percentage points, though this drops to 0.9 percentage points when you exclude the pandemic period. Even the median error – 0.4 percentage points – shows how challenging economic prediction can be during volatile times.

Learning from Uncertainty

The 2024-25 period under review covers a time of significant global economic turbulence and policy shifts. This makes the upcoming evaluation especially valuable for understanding how well the OBR navigated unprecedented circumstances.

Richard Hughes, OBR Chair, has previously emphasised how these regular reviews demonstrate the organisation’s commitment to transparency and continuous improvement in forecasting methodology.

Key Takeaways

• The OBR will publish its annual Forecast Evaluation Report on 2 June 2026, reviewing prediction accuracy
• Three forecasts from 2020-2024 will be assessed against actual 2024-25 economic outcomes
• Historical data shows the OBR tends to underestimate short-term growth but overestimate long-term prospects

What This Means for Kent Residents

While this might sound like Westminster number-crunching, these forecast reviews have real consequences for households and businesses across Kent. More accurate OBR predictions lead to better-informed government decisions about spending on local services, from Medway hospitals to Canterbury’s transport links. For Kent businesses planning investments or expansions, understanding the OBR’s track record helps gauge how reliable future economic projections might be. Residents can use the 2 June report to better understand the economic assumptions underlying government policies that affect their daily lives, from council tax levels to public service funding.