"This revelation was like a football team being deducted points before the start of the season. Reeves was known to be angry and dismayed that the downgrade should take place on her watch rather than any time previously but she quickly used it to put Whitehall chiefs on notice that a three-year spending review would be tougher than previously expected."
"The National Institute of Economic and Social Research said it had looked closely at the economic situation and it was worse than anyone had previously estimated. Rather than a rumoured 20bn shortfall from poor economic growth, the hole would amount to 40bn. The thinktank set the scene for a summer of hand-wringing about Labour's record, the impact of Donald Trump's tariffs and the inheritance from the previous Tory government."
Rachel Reeves faces accusations of overstating damage to the UK's public finances after an OBR downgrade of economic growth. Opposition calls for the chancellor's resignation have increased as scrutiny focuses on who knew what and when before the budget. On 15 June revised OBR forecasts were reported to create a £20bn hole in tax and spending plans, prompting warnings of a tougher spending review. On 6 August the NIESR assessed a larger £40bn shortfall, citing tariffs and the prior government's inheritance. On 7 August a confidential OBR note warned of a reduction in productivity forecasts by 0.3.
Read at www.theguardian.com
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