OBR: economic forecaster warns that 2023 to be ‘very difficult’ amid rising bills and cost of living

The UK’s official economic forecaster has warned households that they should prepare for another “very difficult” year in 2023. The Office for Budget Responsibility (OBR) has said that the impact of rising interest rates and inflation will knock into next year, with the UK expected to be in the throes of a reccesion.

Household bills, interest rates and mortgage rates have all put pressure on families across the country in the past year, with Rishi Sunak warning of a “challenging winter” as a result. However, the OBR appears to be optimistic about the future after 2023.

The forecaster has said that rising rates may be due to turn in 2024. This is expected to take some pressure off the cost of living for millions. OBR chair Richard Hughes added that the forecaster’s estimates are slightly more optimistic than that of the Bank of England.

Mr Hughes also pointed a thinly-veiled criticism toward former Prime Minister Liz Truss. Here’s everything you need to know about what the OBR said at today’s Treasury Committee.

What did the OBR say at Treasury Committee?

OBR committee member David Miles told the Treasury Committee that households should prepare for financial difficults to continue into 2023, but signalled optimism for the future. He said: “2023 is going to be a very difficult year, very likely, but the years after it will not be quite as bad.”

Mr Hughes also pointed out his group’s importance in helping to forecast for government budgets. Truss and her former chancellor Kwasi Kwarteng were heavily criticised after announcing major new economic measure in the infamous mini-budget without forecasting being conducted by the ORB beforehand.

Mr Hughes said: “The committee in its own reports has commented on the growing tendency in UK fiscal policy making for major policy announcements to happen without forecasts.

“Good practice as defined by anyone, not just us but international institutions, would say you shouldn’t make fiscal decisions without them being informed by an up-to-date view of the economic outlook.”