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.

Nugget 1 — APF/QT: There’s been debate around the pace of Quantitative Tightening (QT), and how much this is costing the taxpayer. At @ippr.org we’ve long called for more transparency and it looks like that’s coming – with more detail and a ‘new measure’ next week in the APF report.

I go into these points in more detail in my piece — do give it a read!

3️⃣ The FT rightly note that government policy could raise productivity, but impacts may take time to materialise. Even a modest +0.1ppt medium-term boost would be material - so the OBR should wait until policy details are clearer before baking them in.

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.

1️⃣ Even the “official” LFS data is highly uncertain. Between 2002 Q2–2016 Q3, productivity growth was typically revised by around ±0.6ppts three years after the first estimate: ons.gov.uk/employmentan...

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…

See here, where I discuss this view in more detail: www.ippr.org/articles/nav...

4/ Uncertainty is also high. Big revisions are typical, and the data remains is in development. +/-0.6ppts revisions have been common – further expected with upcoming changes to the LFS. The OBR is navigating in the fog – it should wait for a signal before changing direction.

3/The OBR is often optimistic on productivity - but public investment is high, and we have a raft of productivity-enhancing policy down the tracks. If they downgrade, the OBR may have to upgrade again once policies are final and fully assessed.

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.