Rachel Reeves has confirmed she will water down the Office for Budget Responsibility’s (OBR) scrutiny of tax and spending as she battles to balance Britain’s finances.

The Chancellor said on Monday that she planned to order the OBR to determine whether the UK has met its fiscal target just once a year. The move would end the prospect of her being required to raise taxes or cut spending twice a year.

Ms Reeves told Times Radio: “The International Monetary Fund (IMF) has said that we should move to just one major fiscal event a year and I agree with their recommendations – and to be able to do that, we do need to change the way that the OBR do their forecasting.

“Two full forecasts a year make it harder to have that one fiscal event. There are different ways you could do it: you could do a shorter term forecast, you could do a forecast that just looks at the changes in the economy over that period of time.

“We’ve already moved to having just one Budget a year but we’re trying through these changes to facilitate that.”

The OBR currently provides forecasts twice a year alongside the Budget and another smaller fiscal event, the spring [spending review] or Autumn Statement.

Its last forecast in March wiped out the Chancellor’s £9.9bn of fiscal headroom, which she restored with proposed welfare cuts and changes to the Civil Service.

However, there are concerns that Ms Reeves may have more limited room for manoeuvre in her Budget on Nov 26 because the OBR is expected to downgrade its forecasts for productivity.

The Government was also unable to push through its proposed reforms to welfare over the summer.

The OBR was created by George Osborne, the former chancellor, in 2010 in the wake of the global financial crisis. He pledged that it would “address past weaknesses in the credibility of economic and fiscal forecasting and, consequently, fiscal policy”.

The absence of a forecast from the OBR has been widely credited as a reason for the turmoil in bond markets following Liz Truss’s ill-fated mini-Budget in 2022, when she unveiled a series of unfunded tax cuts.

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