Recommendation 17

We asked the Treasury about the impact of the announcement of the government’s September 2022 Growth Plan (or “mini-budget”) on the cost of government borrowing. The Treasury explained that in the aftermath of the mini-budget, it required the DMO to raise an additional £72 billion. It added that markets were “under a period of stress” and yields were higher in the UK compared to other countries.29 We asked the Treasury if there was more that could be done to ensure that ministerial announcements that might cause concern in the markets do not negatively impact markets and public finances in the future. The Treasury told us that “it is widely deemed to be the case” that very large fiscal events should not go ahead without being accompanied by an OBR forecast to put them into context, except in extreme circumstances. The Treasury added that it had updated its memorandum of understanding with the OBR to ensure that, in the event of any update to the DMO’s remit, the OBR would provide assurance over the government’s cash needs, known as the net cash requirement, even outside of regular fiscal events such as a Budget.30 25 Qq 15, 48 26 Qq 9, 11, 45; C&AG’s Report, para 3.14 27 C&AG’s Report, para 2.7, Figure 11 28 Qq 49, 51, 53 29 Qq 55–56 30 Q 57 14 Managing government borrowing NS&I’s Rainbow Programme