UK fiscal watchdog admits ‘genuine errors’ in inflation forecasting

The Office for Budget Responsibility said its forecasts for 2022-23 where made before ‘unforecastable shocks hit the economy’. Photograph: Bloomberg/Getty Images

The Treasury’s independent economic forecaster has admitted it underestimated the scale of the inflation shock sparked by the Covid pandemic and Russia’s invasion of Ukraine.

Blaming the rapid succession of shocks hitting the economy, the Office for Budget Responsibility said it “significantly underestimated the strength and persistence of inflation”.