OBR scraps July fiscal sustainability report due to Brexit vote fallout

 
Jessica Morris
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The government wants to run a budget surplus by 2019/20 (Source: Getty)

The UK's fiscal watchdog scrapped its medium-term forecast which was due out next month, citing uncertainty from the UK's decision to leave the European Union.

The OBR said Brexit uncertainty meant it wasn't currently worth making estimates using its previous prediction. This means the first official economic forecast post-vote will be the Bank of England's quarterly inflation report due out in August.

Read more: What does the Brexit vote mean for the public finances?

"Given the timing and result of the referendum, and the current uncertainty around our future relationship with the EU, producing projections based on our March forecast would not necessarily be very informative," the OBR said today.

"To produce meaningful long-term projections we would need to make a new medium-term forecast ... and new long-term assumptions in areas such as productivity growth and migration flows."

"Under these circumstances, we have decided to cancel July's FSR."

Read more: UK current account deficit running at a near record high

Independent economists have slashed their predictions for UK economic growth following the Brexit vote, with many fearing it could slide into recession as soon as this year or next.

This will make it even harder for the government to meet its goal of running a budget surplus by 2019/20. Before the vote, the Institute for Fiscal Studies warned a Leave triumph could blow a £20bn to £40bn black hole in the government's plans.

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