Institute for Fiscal Studies (IFS) director Paul Johnson has raised questions about whether the Office for Budget Responsibility (OBR)’s forecasts would remain credible should President Trump slap tariffs on UK goods on Wednesday. 

The OBR’s report included modelling by the International Monetary Fund (IMF) published in January. The IMF’s analysis did not consider the potential effects of Trump’s latest tariff threats. 

Johnson pointed out that the OBR’s central forecast could be made redundant within a week of its release. 

“My sense is that they have chosen something that’s closer to a best case scenario,” he told the Treasury Committee on Tuesday afternoon. 

“If at some point we do end up with the OBR coming more into line with consensus and taking account of the tariffs, then I fear that there comes a moment where the forecast gets significantly worse.

“It’s an incredibly tough judgment for [the OBR] to make,” he added. 

In a presentation after the Spring Statement, OBR chair Richard Hughes said the worst of Trump’s tariffs and a subsequent global trade war could bump one per cent off UK GDP. 

The OBR’s Professor David Miles said on Tuesday morning that tariffs of 20 cent would eliminate Chancellor Rachel Reeves‘ £9.9bn headroom.