00:00I felt that there was a need in that letter to set the record straight on the process by which the forecasts were created at the OBR,
00:08in particular to remove some misconceptions about them that we saw circulating in the media.
00:14We know that this committee has a strong legitimate interest in our processes and how they're done,
00:20and so you deserve to know things, and we were planning to wait until immediately after the budget to release the letter that came to you.
00:30The reason it came late was that, as we all now know, there was an unfortunate incident early accessed by some parties to our document,
00:41and so we were spending most of the immediate aftermath of the budget dealing with that, trying to set up the panel to investigate it,
00:51and therefore the letter didn't come to you until slightly later than that.
00:55I think it might have appeared to some, reading the media, that the OBR came under certain pressure and may have exceeded to that pressure on several things,
01:09for example, moving the window that we used to assess market expectations of interest rates in a direction which might have been helpful to the government.
01:19I think there was some speculation that we had somehow helpfully come up with some extra money, some funds falling down the back of the sofa, so to speak, at the last minute.
01:32I think there was also a view that the OBR's forecast were wildly fluctuating in the process both leading up to the pre-measures forecast and perhaps after it as well,
01:47and that that had made the budget process more chaotic than it otherwise would have been.
01:53And so we were keen to set the record straight on some of those things.
01:57Some of it is very straightforward.
01:59For example, the window that we chose to use to set market expectations of interest rates,
02:06which has quite a significant impact on the assessment of where debt interest costs are going into the future,
02:11had been decided on, I believe, back in July.
02:15So there was no sense in which that was shifted at the last minute to try to find a window that might be particularly helpful.
02:25I think it was also important to set out that in the lead up to the final pre-measures forecast,
02:33which went to the Chancellor right at the end of October, there hadn't been wild fluctuations in our assessment of the outlook.
02:44They had gradually got a little bit more favourable in the sense that the margin, or the headroom as people call it,
02:51looked like it dipped from slightly negative to ever so slightly positive.
02:57But there were no wild fluctuations in those things.
03:02We've seen that, obviously, in the letter on the table, which I should say, of course, that information is in the IFO every year anyway.
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