UK Economic Policy

The framework is operationally live. The Charter for Budget Responsibility was approved by Parliament on 29 January 2025 1 and updated in the Autumn 2025 version laid before both Houses by Written Ministerial Statements (HCWS1275 / HLWS1276) on 27 January 2026 23, with technical changes to deliver the statutory annual OBR rules-assessment policy announced at Budget 2025 4. The Finance (No.2) Bill 2025-26 5 is the legislative vehicle: it carries the amendment to the Budget Responsibility and National Audit Act 2011 enacting the annual fiscal-rules assessment, plus tax measures from Autumn Budget 2025 including the transfer-pricing / permanent-establishment / diverted-profits-tax reform 6 and pensions inheritance-tax changes 78. The Spending Review 2025, published 11 June 2025 9 with supporting departmental efficiency plans 10 and supplementary distributional analysis 11, sets Resource and Capital DEL through 2028-29. On the monetary side, the 2025 HMT–Bank MoU 12 formalised the conclusion of the 5-yearly capital-framework review announced via WMS HCWS456 / HLWS450 1314. The macro-prudential perimeter has been operational since SI 2021/869 15 extended FPC powers under sections 9I/9L of the Bank of England Act 1998 to bank and investment-firm holding companies on a consolidated basis. The OBR Chair vacancy is the live institutional question: Richard Hughes resigned on 1 December 2025 and the HMT recruitment campaign launched February 2026.

Three developments dominate the last six months. First, the Charter for Budget Responsibility: Autumn 2025 1 was laid before Parliament on 27 January 2026, codifying the one-fiscal-event-a-year settlement and the statutory annual OBR rules assessment, responding directly to IMF recommendations 2. Second, OBR published its March 2026 Economic and Fiscal Outlook 3 alongside the Spring Forecast Statement on 3 March 2026 — the first EFO under the revised regime — and a substantial volume of PQs in late March 2026 probed forecast detail. Third, the Lords Economic Affairs Committee published its 4th Report 'Fortifying the fiscal framework' 4 on 28 April 2026, providing the first formal cross-House review of the post-2024 architecture. Alongside these headline developments, the HMT/DMO consultation on expanding the UK Treasury bill market closed 5, the Subsidy Advice Unit reported on the retail, hospitality and leisure business-rates multipliers and pubs and live music venues relief scheme 6, and the Public Accounts Committee published its 77th Report on accountability in small government bodies 7 pressing HMT for a streamlined small-body financial-reporting regime.

Four watch-points over the next 12 months. (1) OBR Chair appointment. Richard Hughes's December 2025 resignation leaves a vacancy at the institutional centre of the framework; the HMT recruitment campaign opened February 2026 and Treasury Committee pre-appointment hearing will follow 1. The successor's stance on the new annual rules-assessment role will be the first practical test of the Autumn 2025 Charter reforms 2. (2) Autumn Budget 2026. This is the first Budget under the one-fiscal-event-a-year settlement, where the statutory annual OBR rules assessment will sit alongside the Budget for the first time under Finance (No.2) Bill 2025-26 amendments to BRANAA 2011 34. Headroom against the fiscal mandate will be the binding constraint. (3) Government response to the Lords Economic Affairs Committee Report. 'Fortifying the fiscal framework' 5 tested the post-2024 design directly; the formal response is expected within two months and will signal whether further Charter amendments are in scope. (4) UK Treasury bill market reforms. The DMO consultation 6 is the live debt-management element of the framework; an outcome paper and any operational changes will feed into the 2026 gilt remit and the wider growth and fiscal-credibility narrative the IMF endorsed in July 2025 7. Beyond these, watch the macro-prudential perimeter: a CPI deviation above 1pp could trigger another open letter from the Governor under the HMT–Bank MoU 8.

Three risks bear naming. First, fiscal headroom risk: the move to one major fiscal event a year 1 removes a release valve for in-year fiscal news, concentrating market sensitivity onto the Budget; if a deterioration emerges between Budgets the government has reduced procedural room to respond. Second, OBR institutional risk: with the Chair vacancy live and the new statutory annual rules-assessment regime starting at Autumn Budget 2026, the next OBR Chair appointment carries unusual weight — Treasury Committee pre-appointment hearing scrutiny will matter 2. Third, Inferred from corpus gap: monetary policy is in scope per the thread definition but the corpus is heavily fiscal — only HMT–Bank Open Letters and the 2025 MoU 3 surface; the wider MPC reaction function, inflation-target framework debate and operational independence questions are silent in the events list and would need separate work. Inferred from corpus gap: the corpus also contains no event giving the new OBR Chair recruitment a definitive interview / appointment date — the February 2026 launch is on a candidate page only. Inferred from corpus gap: the Treasury Committee's draft Finance Bill 2025-26 scrutiny 4 closed 7 October 2025 but the corresponding committee report is not in the events list, so the committee's substantive position is read from process rather than published con