Economy · Budget & tax · 4 November 2026
NIESR blog challenges OBR public finance forecast
The National Institute of Economic and Social Research has published a blog post outlining an alternative view of the UK's public finances. The author argues the official OBR forecast is not credible, suggesting the primary balance will remain in deficit over the next five years rather than moving into surplus.
The National Institute of Economic and Social Research has published a blog post that outlines a credible path for the UK's public finances which differs from the official Office for Budget Responsibility forecast. The author contrasts the OBR's projection with their own analysis, suggesting the official timeline for fiscal improvement is unrealistic. This view offers a counterpoint to the current government narrative on budget management.
According to the OBR, the primary balance is forecast to improve by 3 per cent of GDP over 5 years, moving from a 1.5 per cent deficit in 2025-26 to a surplus by 2030-31. The IMF has praised the UK for taking decisive action on the deficit, yet the NIESR author notes that most of this fiscal tightening is scheduled for 2029-30, a period close to the next election. In contrast, the alternative credible path suggests the primary balance will remain in deficit over the next five years.
The author estimates the current budget will be in deficit by around £30 billion in 2029-30, missing fiscal rules significantly. This projection leads to a debt ratio rising to 101 per cent of GDP by 2031-32. Historical data since 2010 shows that while OBR forecasts typically predict debt peaking then falling, actual outturns show debt continuing to rise. The author describes their approach as the "Augustinian approach" to fiscal policy, a term attributed to Charlie Bean.
The analysis suggests this forecast is closer to market expectations and may explain why UK borrowing costs are the highest in the G7. The 2025 Fiscal Risks and Sustainability Report provides the context for these ongoing debates on fiscal sustainability. This blog post represents the author's opinion and guess, rather than a peer-reviewed study or official government guidance.
The announcement does not specify whether the government will respond to these findings or adjust its fiscal rules. It also does not detail the specific mechanisms by which the alternative path would be achieved, leaving the practical implementation of such a strategy unclear for policymakers and markets alike.
Written by StreetOwl from National Institute of Economic and Social Research, a think tank’s own announcement. It was drafted by StreetOwl’s own model, every figure and quotation was checked by code against the announcement, and it was read and approved by Michael Rossi before it went up. It says what was announced, not what anyone should do about it.
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