United Kingdom: in March 2021 the OBR expected inflation of 1.8% for 2022. The outcome: 9.1%
United Kingdom: inflation, %, 2022
Reality missed the forecast by 7.3 percentage points in a year. The forecast came close only in the last editions, with the year under way.
More
Since 2010 the UK’s Office for Budget Responsibility (OBR) has forecast the economy with each Budget and in the autumn. Inflation is the rise in consumer prices over a year (CPI).
Across: when each forecast came out. Blue: the forecasts for 2022 in each edition; orange: the outcome. The shading is the error.
- Office for Budget Responsibility, November 2017
2.0%
- Office for Budget Responsibility, March 2018
2.0%
- Office for Budget Responsibility, October 2018
2.1%
- Office for Budget Responsibility, March 2019
2.0%
- Office for Budget Responsibility, March 2020
2.1%
- Office for Budget Responsibility, November 2020
1.6%
- Office for Budget Responsibility, March 2021
1.8%
- Office for Budget Responsibility, October 2021
4.0%
- Office for Budget Responsibility, March 2022
7.4%
- Office for Budget Responsibility, November 2022
9.1%
- Outcome: 2022
9.1%
The largest misses of a next-year forecast (without the pandemic years 2020–2021); for borrowing, the forecast made one or two years before the fiscal year with the largest overshoot in pounds. Outcome: OBR outturn as available at the March 2026 forecast.
The card does not say the forecast was worse than others: almost everyone underestimated the inflation of 2022, central banks, the European Commission and the IMF alike. It shows how far reality can move from an official expectation in a single year.
A question for this picture
Could this have been seen a year ahead, and what should one have done with the forecast?