Financial forecast folly and vindication for Michael Gove: Toby Neal on politics

If that's not funny, nothing is. Even the name is a laugh. OBR stands for Office for Budget Responsibility, a grandiose title more suited to something from Soviet-era Russia, or modern Russia come to that.

It was set up by George Osborne in 2010 to give a cover of financial respectability to his austerity measures from an independent body.

I know I've said this many times, but anybody who believes economic forecasts wants their head examining. OBR really stands for Only Bleedin' Rong. 

When Michael Gove said there is no such thing as experts, he should have been knighted, not mocked.

There are of course experts: people who can do higher maths for example, or are wonderful cooks. He wasn't talking about that. He was speaking in the context of economists and financial analysts - and the evidence demonstrates how right he was. 

For real expertise on fortune telling, you should visit some of the outlets on Blackpool promenade, which are a lot cheaper and are in comparison models of reliability.

It must be a great life being an economist. So many surprises! If you want the proof, here are some actual news reports from the last six months or so, which can be summarised as Tales of the Unexpected.

• May 23: British retail sales rose 1.2 per cent in April, significantly overshooting analysts’ expectations. 
• June 12: Chancellor Rachel Reeves has refused to rule out future tax rises after the UK economy suffered its worst contraction for a year and a half in April. The economy unexpectedly shrank by 0.3 per cent.
• July 11: Chancellor Rachel Reeves has called the latest figures on the economy "disappointing" after the UK economy shrank unexpectedly in May. The fall in economic output confounded analysts who had expected to see slight growth.
• August 14: UK economic growth slowed between April and June, according to official figures, but was better than expected. 
• August 20: UK inflation rose by more than expected to 3.8 per cent.
• September 19: UK retail sales rise by more than expected in August, according to the Office for National Statistics. 
• September 19: UK government borrowing was £18 billion in August, the ONS said, which was higher than analysts had expected.
• October 22: UK inflation unexpectedly remains at 3.8 per cent for the third month in a row.
• November 13: The UK economy saw slower than expected growth of 0.1 per cent in Q3 - the three months to September. 
• November 18: The UK inflation rate falls for the first time in seven months to 3.6 per cent in the year to October. The drop was slightly less than economists had expected.
• November 21: UK government borrowing was higher than expected last month.
• November 21: Sales at UK retailers slumped unexpectedly last month. Economists had been expecting sales growth to be flat on the previous month.

In the spirit of balance, I give you this report from September 12: The UK economy failed to grow in July, WHICH WAS IN LINE WITH EXPECTATIONS.

So the audit based on evidence is that the odds on any economic forecast by any so-called experts being correct are around 10-1 against, or worse.

And yet economic forecasts are rarely carried on news bulletins with accompanying public health warnings that they have been mostly wrong before and are probably wrong again.

The Government not only takes them seriously, but relies on them and acts on them.

Here's another news item for the list, and one that is chilling: November 14: Rachel Reeves has decided against raising income tax rates at the Budget later this month, partly due to better-than-expected economic forecasts."

So by now you should know what to expect from that.

I hardly need to add that while the OBR expects growth of 1.4 per cent next year, the Organisation for Economic Co-operation and Development (OECD) expects it to be lower at 1.2 per cent, although, naturally, that is an improvement on what it previously expected.