UK budget watchdog to factor persistent inflation into forecasts

Britain's budget watchdog, the Office for Budget Responsibility (OBR), announced it will incorporate the unexpected persistence of inflation into its upcoming forecasts. This adjustment follows the 2022 energy price shock and the recent Iran war, which the Bank of England has indicated could lead to higher inflation and weaker growth. The OBR's updated forecasts will influence the government's fiscal planning, public spending limits, and are closely monitored by financial markets and politicians. The watchdog has refined its modelling toolkit to better account for inflation pass-through effects, learning from the impact of the previous energy shock on public spending and debt.