Nugget 2 — Productivity: After an upgrade in the last report, the Bank changed its mind and downgraded the path: growth in output per worker is ~0.2pp below the OBR on average and ~0.1pp below its Aug forecast. We'll be keeping an eye on how that compares to the OBR at budget.

2️⃣ The BoE recently upgraded its near-to-medium term productivity forecast. Recent LFS data has actually been in line with the OBR’s view. A downgrade larger than 0.1ppt would make the OBR more pessimistic than the BoE — an unlikely stance.

The FT illustrate uncertainty using recent upswings in admin data (see my recreation below) — adding even more fog for the OBR to navigate. But this isn’t the only source of uncertainty. There are several reasons why the OBR should remain cautious…

2/Recent weak data was expected - we are still at the tail end of high inflation disruption. All forecasters expect a turnaround. The BoE in fact revised up its (respected) forecast, now similar to the OBR. Recent outturn data is thus not a reason for the OBR to change.