Having resisted two invitations to comment on the Office for Budget Responsibility, Bank of England governor Andrew Bailey can’t resist swishing at the third (has he been watching England batting in Australia?)Q: You have commented on political attacks on the Federal Reserve before, so are the political attacks on the Office for Budget Responsibility dangerous?Bailey reminds today’s press conference that there are good reasons why the Office for Budget Responsibility was created by George Osborne in 2010, telling reporters:The reason the OBR was created was to ensure there was a source of independent forecasting and an independent assessment of fiscal policy,That’s important, it’s important in many countries,Britain’s not unique… there’s nothing unusual about this absolutely core principle,So where attacks on the OBR are concerned, Bailey says we should “please remember why it was done and the principles underlying it”,However, it’s not for the Bank to get involved in “the day-to-day affairs of that”, he adds.

Time to wrap up… here are today’s main stories:Robert Chote, the former head of the OBR, is urging everyone involved reflect on how you make it an orderly process so the fiscal watchdog can serve the public as well as possible.Asked about the events of the last week – from the leak of the OBR’s outlook report, to its letter to the Treasury Committee outlining how the forecasts evolved, the Treasury’s annoyance at that, and then Richard Hughes’s resignation as OBR chief yesterday – Chote says the leak was “a very serious and unfortunate episode”.And he pays tribute to Hughes for the work he has done over the last five years since taking over from Chote.Chote tells the House of Lords economic affairs committee:He has done an awful lot of great value for the work of the OBR, and his decision to step down based on what he thought was best for the future of the organsiation is entirely in character with what I would expect, and consistent with the spirit of public service that he has brought.And that’s the end of the hearing.

Robert Chote has dismissed the idea that the OBR should only produce one economic forecast per year, rather than two as at present.He tells their lordships:“One would be a really bad idea, and two is a sensible one.”Chote also cautions that any changes to the forecast process cannot take us away from a world where chancellors or prime ministers are asked about future tax policy.He says:The idea that this is going to mean there is no speculation for six months, a year, about what’s going to be in the next budget is for the birds.Last week chancellor Rachel Reeves said she would only respond to the OBR’s forecasts once a year.

That means the spring forecast will be a health check on the economy and the public finances, rather than prompting policy changes…Robert Chote then explains that he generally had a good working relationship with the Treasury when he was running the OBR.There was a joint recognition that the process served the public good well, he tells the House of Lords economic affairs committee.He says there were occasional bumps in the road, though, such as information coming late to the fiscal watchdog, or slowed by tensions between departments.But his overall advice is to “concentrate on the quality of the sausage you are presenting to the customer, don’t get overwrought about people seeing every process about making them”.It is ‘nonsense’ to claim that the Office for Budget Responsibility has forced governments to change policy, former OBR chief Robert Chote says.

During his session with the House of Lords economic affairs committee, Chote is questioned by former chancellor Norman Lamont, who asks:Q: Are governments sufficiently clear that their scope for action against the background of fiscal rules is self-imposed?Chote replies that this issue has, on occasions, been framed “very unhelpfully” as a situation where the OBR has forced decisions on governments.He says:There are occasions where governments say they have been forced into a decision by the OBR or some forecast change that the OBR has made, That’s nonsense.Chote explains that the OBR provides its best assessment of the outlook for the public finances, including variables that the government may have decided it wants to target, on the basis of current policy, and will talks about the uncertainties around those.But he insists that the elected politicians have the choice about what to do if they are off-track against their fiscal rules.Chote explains that if the OBR comes to the chancellor in the run-up to the budget, and says “you are not on course to achieve the target you set yourself”, it is for them to decide whether to change the policy, to change the rules, or decide they are content for the forecast to show that target is being missed, and they will address that at a future fiscal event.

Sir Robert Chote then wins quote of the day.Asked whether fiscal rules, and organisations such as the OBR, have had entirely positive impact on the role that bond markets play in enforcing fiscal discipline on governments, Chote says that the key value is that bond markets are giving a richer “information set” when deciding when to lend.But while that transparency is important, the former OBR chief tells the Lords economic affairs committee:“If I knew precisely what affected bond yields I wouldn’t be sitting here, I would be on a yacht.”Sir Robert Chote, the former head of the Office for Budget Responsibility, is testifying to the House of Lords economic affairs committee now, about the UK’s fiscal framework.Chote explains that the OBR has brought valuable transparency to the public finances, by producing its economic forecasts and assessing policy.

The OBR, he says, is unusual in producing the official forecast for the economy and public finances and incorporating the official measures, Chote.Other fiscal councils in other countries either comment on the reasonableness of the forecasts, or produces a parallel forecast.Chote says we can’t run the counterfactual of what the UK’s debt/gdp ratio would look like without the OBR.Referring to his time running the OBR, from 2010 to 2020, Chote says self-deprecatingly:I’d like to think that at the margins, the OBR has encouraged better policy decisions than there otherwise would have beenBut I have to put my hand up.The public finances were worse when I left the OBR than when i arrived, but I don’t think that was entirely down to me.

There were some external shocks that came along.Chote, now president of Trinity College, Oxford, then explains why the OBR is valuable:The real value is in having that transparency, the integrity of independent analysis with which reasonable people may disagree, but putting that forward for the benefit of the public, for investors, for voters, for parliament.After a weak start to December yesterday, the US stock market is rising at the start of trading.Growing confidence that US interest rates will be cut soon helped the Dow Jones Industrial Average, and the S&P 500 index, to gain 0.27% at the start of trading.

Shares in Warner Bros Discovery have jumped at the start of trading as it receives a second round of takeover bids.New offers on the table for Warner Bros Discovery include a mostly cash offer from Netflix, Bloomberg reported last night, adding that bankers for Paramount Skydance and Comcast also worked over the Thanksgiving weekend on new bids.This latest auction round comes after Warner rejected a mostly cash offer of nearly $24 a share from Paramount, and started a strategic review that could result in a sale.In early Wall Street trading, shares in Warner Bros.Discovery are up 1.

35% at $24.21.Influential investor Michael Burry has warned that he sees tough times ahead in the stock market.Burry, one of the main charactors in The Big Short, has told the Against The Rules podcast that he sees several “bad years ahead”.Explaining why he recently closed his hedge fund, Burry said he didn’t want a repeat of the run-up to the 2008 crisis when he faced repeated criticism from investors for betting against the US housing market, before being proved right when financial crisis erupted.

Burry says:I think that we’re in a bad situation in the stock market.I think the stock market could be in for a number of bad years.I think it could be a longer bear market, more akin to 2,000 [when the dot-com bubble burst].Burry argues that the structure of the market today means that more money is invested “passively”, through index funds, with perhaps less than 10% actively managed.That increases the chances of a wide sell-off, Burry arges, saying:Now I think the whole thing is going to come down.

Burry then explained that having closed his fund, he has recreated his positions in his own account, including a bet against data firm Palantir,Explaining why, he says:There are five billionaires who came out of Palantir, because they owned Palantir stock,The revenue was $4bn,The billionaires to revenues ratio was greater than one, and I’d never seen that before,Looking back to the 2008 crisis, he told podcast host Michael Lewis (who wrote The Big Short) that it was “a very unique circumstance” and a “once in a century trade”.

The key, he explains, was that he was permitted to buy insurance on housing bonds which were incredible illiquid, and then profit off that insurance without actually owning the insured item.British shoppers spent more over the Black Friday/Cyber Monday period than last year.Data from Adobe Analytics shows that £3.8bn was spent online across the four days, which is 4.6% more than a year ago.

Adobe Analytics says the top performing product categories over the four days were jewellery, video games, toys, electronics, personal care products, sporting goods and apparel.Across all retail categories the average discount was 16.7%, with the deepest discounts on computers, televisions and apparel.The OBR has declined to criticise Rachel Reeves over the speech she gave at the start of November implying that she would need to raise income tax.Prof David Miles told the Treasury committee today that the chancellor was not misleading when, on 4 November, she appeared to lay the groundwork to raise income tax ratesMiles told the committee:My interpretation was, and others might interpret differently, that the chancellor was saying that this was a very difficult budget and very difficult choices needed to be made.

And I don’t think that that was in itself inconsistent with the final pre-measures assessment we’d be made which, although it showed a very small positive amount of so-called headroom, it was wafer thin.Andrew Sparrow’s Politics Live blog has more details from the OBR’s session at parliament.The OBR has also denied being “at war” with the Treasury after the resignation of its boss Richard Hughes.Budget responsibility committee member Professor David Miles described the relationship with the Treasury as “very close” but hoped for a “smoother” process next year.He told the Commons Treasury Committee:“I wouldn’t say we were at war with the Treasury.

“I mean, we have a very close relationship with the Treasury.In fact, we rely not just on the Treasury but other departments in Government for analysis of many sorts of measures.”The upheaval at the Office for Budget Responsibility, whose chair resigned last night over the early release of its budget documents last week, has not caused alarm in the markets.UK bond prices have slipped a little today, which has nudged the yield (or interest rate) on the debt a little higher, wiping out more of the immediate rally after the budget.The yield on 10-year gilts is up 2.

5 basis points, to just over 4.5%, slightly higher than at the start of Budget Day last week30-year gilt yields have risen by 3bps to 5.28%, still lower than before the budget.Bill Blain, CEO of Wind Shift Capital Advisors, suspects there may be change at the Office for Budget Responsibility, writing:When the organisation that is supposed to exude market stability becomes the cause of instability….Then it’s time to move on.

The resignation of Richard Hughes had an inevitability about it… The question for markets will be the independence of what follows…The Office for Budget Responsibility complained to senior Treasury officials in the run-up to the budget about a flurry of leaks that it said spread “misconceptions” about its forecasts, it has emerged.Prof David Miles of the OBR’s budget responsibility committee told MPs on the Treasury select committee on Tuesday that the watchdog had raised the issue of leaks with the department before the chancellor’s statement last week.“I think it was clear that there was lots of information appearing in the press which perhaps wouldn’t normally be out there and that this wasn’t from our point of view particularly helpful,” he said.He added:“We made it clear that they were not helpful and that we weren’t in a position of course to put them right.”Miles was appearing before the committee after the OBR chair, Richard Hughes, resigned on Monday, taking responsibility for the inadvertent release of its budget documents about an hour before Rachel Reeves stood up to announce her tax and spending plans.

Away from the Bank of England, the OECD has forecast that the UK will be the third-fastest growing member of the G7 next year.In a new report, the Paris-based thinktank has warned Rachel Reeves that tight government spending and higher taxes will restrict consumer expenditure.The OECD predicts the UK economy will grow by 1.2% in 2026, faster than France, Germany, Italy and Japan, but slower than the US (1.7%) and Canada (+1.

3%).More here:Q: Is there a risk that more retail investors are lured into the stock market, and then the AI bubble bursts?Andrew Bailey says the UK needs more investment in the real economy, that’s why pension reforms are important.Andrew Bailey declines to comment on whether last week’s budget would boost UK growth.He says artificial intelligence is likely to be the next technology to spur productivity growth.But its vital that the UK has an environment of policies where we can support growth,, he says:If we don’t raise the potential growth rate, and thus the actual growth rate of the economy, the whole policy context is much more difficult.

As we’re seeing, the choices are much more difficult to make.So we have, all of us, to be absolutely focused on raising the growth rate.