The unexpected resignation of Richard Hughes, head of the Office for Budget Responsibility (OBR), was prompted by an early release of Budget details. However, the challenges for Chancellor Rachel Reeves do not end with his departure; she now faces the task of appointing a new OBR head.
Reeves is tasked with finding a respected economist who fits the traditional independent model, as any deviation might be scrutinized by the markets. Political pressures add complexity to the selection process, especially since Hughes had resisted attributing government credit for 'pro-growth' policies unless significantly impactful, none of which met the 0.1% national income threshold during his tenure.
Concerns about the OBR's independence from political influence have been evident. Hughes fiercely defended the agency from political pressures, and his resignation follows a series of challenges, including backlash during the Liz Truss mini budget period. Moreover, the OBR is perceived differently across the political spectrum—some view it as an extension of 'woke deep state', while others label it an 'agent of austerity'.
The role now remains vacant, with Hughes' departure placing additional scrutiny on how Shields tackles the balance between independence and political accessibility without incurring financial market ramifications.