Economists face scrutiny as ONS data raises doubts on UK economic forecasts

On April 1, 2025, UK economists appeared before parliament's Treasury Committee to discuss Rachel Reeves's spring statement amidst growing economic uncertainty. The Chancellor recently outlined spending cuts without tax increases, attributing the measures to a significant slowdown in economic growth. The Office for Budget Responsibility (OBR) revised its economic growth forecast for the year down from 2% to 1% following a rejection of the government's welfare cut savings projections by the official spending watchdog. This unexpected setback forced Reeves to implement further cuts to government welfare bills, which included significant alterations to the health element of universal credit for new claimants. In addition to welfare changes, financial pressures on households intensified with numerous cost increases scheduled to take effect. Energy, water, and council tax bills are poised to rise, leading to what is being termed as 'awful April,' a period when many households will experience a sharp spike in living costs. Average energy bills for those on standard variable tariffs will increase by £111 per year, while water bills are expected to jump significantly in certain areas. Local authorities across England, Scotland, and Wales are also implementing council tax hikes, some approaching 10%. Such developments are igniting calls for governmental intervention to alleviate pressure on beleaguered households. At the same time, Richard Hughes, chairman of the OBR, conveyed concerns during the Treasury Committee meeting regarding the integrity of the Office for National Statistics (ONS) data. He indicated that a drastic decline in survey response rates has compromised the reliability of economic indicators. The Chairman remarked that accurate assessments of the labour market are increasingly difficult to achieve, and there are additional worries about the validity of GDP measurements. Reports suggest that the ongoing investigation by the government may focus on addressing inaccuracies in the statistics provided by the ONS. Moreover, this situation raises significant concerns about the ability to strategically navigate the current economic landscape in the UK. As households brace for these cost increases, economists urge policymakers to consider expansively how these changes will affect financial stability among citizens. The combination of welfare cuts and soaring living expenses is creating an environment of anxiety, prompting experts to advocate for renewed dialogue on government support mechanisms. With the OBR's revised forecasts and mounting pressures on ordinary people, the landscape of the UK's economic future appears increasingly precarious.