The Office for Budget Responsibility (OBR) plays a bigger role in the business environment than it might first appear. Its forecasts and assessments shape government tax and spending decisions, influence market and investor confidence, and affect how the UK’s fiscal position is viewed internationally. All of this feeds through to businesses’ cost of capital, access to finance, and confidence to invest, hire, and grow in the UK.
This inquiry by the Treasury Select Committee in January 2026 matters because fiscal uncertainty has real-world consequences. Over the past year, we’ve seen how short-term policy changes and unclear signals can delay investment decisions and raise financing costs. The CBI’s response focuses on how the OBR and the wider fiscal framework can better support long-term stability and predictability, and why business insight is crucial to that conversation.
The OBR has become a central pillar of the UK’s fiscal framework over the past 15 years. Its independence from government has materially improved the credibility, transparency, and discipline of fiscal policymaking, strengthening confidence in the UK’s public finances. For businesses, this credibility matters: OBR forecasts shape market expectations, influence government tax and spending decisions, and affect perceptions of fiscal risk. Together, these factors feed directly into firms’ cost of capital, borrowing decisions, and long-term investment planning.
While the OBR has improved transparency and reduced the scope for political bias in forecasting, the way its analysis is used can sometimes run the risk of reinforcing short-termism and risk aversion. A strong focus on near-term rule compliance and headroom has, at times, crowded out consideration of long-term productivity, investment, and fiscal sustainability.
The CBI's full response to the Treasury Select Committee inquiry
The CBI view
The CBI welcomes the recent move to a single fiscal event each year, which should support greater stability for businesses and enable a more strategic, long-term approach to fiscal policymaking. Placing greater emphasis on scenarios, probabilistic ranges, and long-term sustainability analysis would provide a more meaningful assessment of the public finances than the frequent, narrow focus on short-term rule compliance that has evolved over time.
Looking ahead, the CBI strongly supports the continued independence of the OBR and does not advocate changes that would weaken its role. Instead, we see scope to strengthen how the OBR engages with a wider range of external evidence, including business perspectives, and to elevate the status of its long-term analysis - particularly the Fiscal Sustainability Report - within Parliament and the fiscal policy process. Doing so would improve the quality of debate, enhance confidence in fiscal decision-making, and support a more stable investment environment.
Contact Mohammad Jamei , CBI Director of Economic Policy, with any feedback or questions you may have.