Recommendation 26

The Treasury’s macroeconomic forecasting ability appears to have eroded since the formation of the OBR. The Treasury needs to maintain sufficient forecasting capacity outside the OBR so that it can ensure that it can adapt policy responses rapidly to an urgent situation. In its response to this report, the Treasury should explain in detail its short-term macroeconomic forecasting capabilities, and how macroeconomic forecasting analysis has informed the design, scope and scale of its interventions during the crisis.