Thread by @SteveBakerHW

Yesterday, I asked Sir Charles Bean from @OBR_UK if he agrees analysts have not adequately taken into account the behavioural impact of coronavirus on the economy and on healthcare.

Sir Charles said the impact of the pandemic onto the economy comes through two routes…

@OBR_UK I then asked Richard Hughes, the Chair at @OBR_UK, to join me in calling on economists producing analysis of the costs to be careful not to fall into the error of miscategorising the source of harms.

Watch his response here:

@OBR_UK In my third question, I asked Andy King if he thinks it’s realistic @OBR_UK’s forecast doesn’t contain public spending on Covid from March 2022.

“That will emerge over the course of the next year as we learn more about how effectively the vaccines can be rolled out”.

@OBR_UK Andy King, @OBR_UK: “The ebb and flow of the virus has affected how the Chancellor has made his decisions”.

@OBR_UK I continued to ask, in those public spending decisions noted above, whether there’s been a degree of optimism bias and if that is a problem.

Richard Hughes: “optimism bias is in human nature”.

@OBR_UK I questioned the Chair of the @OBR_UK on his assessment of the Government’s willingness to live with this reality that this disease is now going to be endemic in our society.

Watch Richard Hughes response here:

@OBR_UK The @OBR_UK does not know how the Government is cutting £10 billion a year from non-covid departmental spending, in line with last week’s Comprehensive Spending Review.

@OBR_UK Economists are choosing to avoid the term ‘austerity’, according to Richard Hughes of the @OBR_UK.

Discussing the public sector pay freeze, Hughes also chose not to comment on how MPs set their pay, which is set by @IPSAUK.

@OBR_UK @ipsaUK "The Government is more exposed to rises in interest rates. Long term interest rates are not locked...10 years ago 1/4 of public sector debt had a maturity of less than one year, that ratio is more than 1/2…the consequences of a rise of interest rates would be felt more quickly"