Key Findings — Forecast Accuracy Ratios (Actual as % of Forecast)
| Metric | Forecast Horizon | Actual as % of Forecast | What It Means | Verdict |
|---|---|---|---|---|
| CPI Inflation | 2 Years | 387% | Actual inflation was almost 4× forecast. OBR predicted ~2% for 2022; actual hit 11.1%. | 🔴 Catastrophic miss |
| Public Borrowing | 2 Years | 178% | Borrowing was 78% higher than forecast at 2-year horizon. Persistent underestimation. | 🔴 Significant miss |
| Public Borrowing | 1 Year | 174% | Even at 1-year horizon, borrowing was 74% above forecast — structural optimism. | 🔴 Significant miss |
| GDP Growth | 1 Year | 126% | Near-term growth slightly underestimated — actual was better than forecast at 1yr. | 🟡 Minor miss (underestimate) |
| GDP Growth | 5 Years | 73% | Long-term growth was only 73% of what was forecast — OBR too optimistic long-term. | 🟡 Significant overestimate |
| GDP Growth | 2 Years | 69% | Medium-term growth was only 69% of forecast — OBR systematically too optimistic. | 🟡 Significant overestimate |
🚨 The headline finding: CPI inflation was forecast at ~2% for 2022 but reached 11.1% — a 387% error ratio. This single forecasting failure had cascading consequences: it led to higher-than-expected debt interest payments (index-linked gilts), higher wage demands, higher public spending, and larger borrowing. The OBR's own Forecast Evaluation Report acknowledges this as its largest modern forecasting error.
CPI Inflation — OBR Forecast vs Actual (2019–2024)
OBR Forecasts at time of publication
Actual CPI outturn
⚠️ At the March 2020 forecast, the OBR projected CPI at 1.5% for 2022. At the March 2021 forecast, it projected 2.0% for 2022. Actual CPI in 2022 reached 11.1% — a level not seen since the 1980s. Even the October 2021 forecast significantly underestimated what was coming.
Public Borrowing — OBR Forecast vs Actual (£bn)
OBR Forecast (at time)
Actual Borrowing
⚠️ The OBR has persistently underestimated public borrowing across multiple forecast years. Between 2019/20 and 2024/25, actual borrowing exceeded the OBR's 1-year-ahead forecast by an average of 74%. This has a compounding effect — each year of underestimated borrowing adds to the debt stock, making future forecasts start from a higher base.
GDP Growth Forecasting Pattern — Short-Term Underestimate, Long-Term Overestimate
GDP Growth Forecast
GDP Growth Actual
📋 The pattern: At 1-year horizon the OBR slightly underestimates growth (actual was 126% of forecast on average). But at 2-year and 5-year horizons it overestimates — actual was only 69% and 73% of forecast respectively. This reflects a systematic tendency toward "optimism bias" in medium and long-term projections, which overstates future tax revenues and understates future debt burdens.
Forecast Accuracy at a Glance — How Far Off Was the OBR?
MetricForecast (blue) vs Actual (red)Error
CPI Inflation (2yr)
+387%
Forecast: 2%
Actual: 11.1% (+387%)
Borrowing (2yr)
+178%
Forecast
Actual: 78% higher
Borrowing (1yr)
+174%
Forecast
Actual: 74% higher
GDP Growth (1yr)
+126%
Forecast
Actual: slightly higher
GDP Growth (2yr)
69%
Forecast
Actual: lower
GDP Growth (5yr)
73%
Forecast
Actual: lower
What This Means for Investors & Citizens
📈 Inflation Risk Remains Hard to Model
Large inflation misses can materially affect bond yields, real returns and fiscal outcomes. When inflation is higher than forecast, index-linked gilt costs soar, real wages fall, and borrowing exceeds projections. The 2022 episode added tens of billions to the interest bill.
💷 Borrowing Is Probably Worse Than It Looks
Persistent underestimation of borrowing by 74–78% means the true fiscal outlook is likely worse than the OBR's central forecasts. Investors in gilts should treat the forecast as an optimistic scenario and stress-test against higher borrowing outcomes.
📊 Long-Term Growth Assumptions Are Optimistic
The OBR systematically overestimates medium and long-term GDP growth. This matters enormously for the debt trajectory pages on this site — the OBR's "274% of GDP by 2074" projection assumes growth that may not materialise. The true trajectory could be worse.
🎯 Treat Forecasts as Central Scenarios
The OBR itself acknowledges its forecasts are scenarios, not predictions. The evidence shows they can be materially wrong even at short horizons. Any assessment of UK fiscal sustainability should run multiple scenarios — and the downside scenarios should be taken seriously.
✅ In fairness to the OBR: No forecaster predicted COVID-19 or Russia's invasion of Ukraine. Many of the largest errors were driven by genuinely unforeseeable external shocks. The OBR also publishes fan charts showing its uncertainty ranges — it is the central scenario in those charts that tends to be reported as "the forecast," underplaying the inherent uncertainty. That said, the systematic optimism bias in borrowing forecasts predates these shocks and requires explanation.
The OBR's Own Assessment (June 2026 Forecast Evaluation Report)
BETTER
Short-term GDP growth (1yr). Near-term forecasts reasonably calibrated on growth.
POOR
Inflation forecasting. The 2022 inflation shock was the largest forecasting error in the OBR's history.
MIXED
Borrowing and medium-term GDP. Systematic optimism bias identified, partly external-shock-driven.
📋 The OBR's conclusion from its own evaluation: "Forecast accuracy deteriorates as the forecast horizon increases. This is consistent with the broader forecasting literature, where uncertainty compounds over time. The most notable finding is the magnitude of recent inflation forecasting errors. For economists and investors, official forecasts should be viewed as informative baselines rather than precise predictions."
⚠️ The implication for this website's data: All projections shown on UK-Debt.info — debt trajectories, interest payment forecasts, pension cost estimates — are based on OBR or OBR-derived figures. In light of the accuracy record above, these should all be treated as central scenarios. The actual outcomes could be materially different, and based on the historical record, are more likely to be worse than projected than better.