Can the OBR be trusted?

It was the absence of the Office for Budget Responsibility’s judgment that was blamed for the bond market crisis after Liz Truss’s mini-Budget. Truss and her chancellor Kwasi Kwarteng had rushed to enact their vision for a fast-growing economy without waiting for the wisdom of the government’s official fiscal watchdog. For Truss, the OBR is just another part of the establishment that was out to get her.

But then, can the OBR be entirely trusted anyway? It seems that it has created a black hole of its own making – by overstating Public Sector Net Financial Liabilities (PSNFL). PSNFL is the measure that Rachel Reeves has chosen to use for her new fiscal rules – preferring it to the measure previously used because it flatters, slightly, the government’s balance sheet. It doesn’t exactly wipe out the national debt, but it takes into account extra assets, making it appear that the government is a little less indebted than it otherwise appears.