United Kingdom: in March 2008 the Treasury expected growth of +2.5% for 2009. The outcome: −4.6%
United Kingdom: real GDP growth, %, 2009
Reality missed the forecast by 7.1 percentage points in a year. The forecast came close only in the last editions, with the year under way.
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HM Treasury (until 2010) and the OBR publish a forecast of the economy and public borrowing with each Budget. Borrowing is the gap between public spending and revenue over the fiscal year (April–March).
Across: when each forecast came out. Blue: the forecasts for 2009 in each edition; orange: the outcome. The shading is the error.
- HM Treasury, December 2004
+2.5%
- HM Treasury, March 2005
+2.5%
- HM Treasury, December 2005
+2.5%
- HM Treasury, March 2006
+2.5%
- HM Treasury, December 2006
+2.8%
- HM Treasury, March 2007
+2.8%
- HM Treasury, October 2007
+2.8%
- HM Treasury, March 2008
+2.5%
- HM Treasury, November 2008
−1.0%
- HM Treasury, April 2009
−3.5%
- HM Treasury, November 2009
−4.8%
- Outcome: 2009
−4.6%
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: in 2008–09 almost everyone missed the same way. 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?