The Office for Budget Responsibility (OBR), Britain’s independent fiscal watchdog, plunged into crisis following the resignation of its chair, Richard Hughes, after a damning internal inquiry labeled a budget document leak as the “worst failure” in the institution’s 15-year history. Hughes announced his departure, stating he took “full responsibility” for the organization’s failure to protect sensitive information, a move that kept budget recriminations alive for a fifth day and intensified political pressure on Chancellor Rachel Reeves.

The leak, which saw the OBR’s Economic and Fiscal Outlook (EFO) document published nearly an hour before Reeves’s budget speech on November 26, was not the result of hostile cyber activity or collusion. Instead, an investigation led by the OBR’s chief of staff, Laura Gardiner, and Ciaran Martin, former head of the National Cyber Security Centre, found the cause to be “configuration errors” reflecting systemic issues. The OBR had uploaded documents to a link it believed was inaccessible, but a particular add-on to the WordPress publishing system and the Download Monitor plug-in created a vulnerability, making the link live. The market-sensitive report was accessed 43 times from 32 different devices in the hour before the chancellor’s speech. More alarmingly, the inquiry revealed a similar breach occurred in March 2025 during the spring statement, highlighting a long-standing weakness in OBR procedures.

Richard Hughes, who had led the OBR for five years, expressed being “mortified” by the early release and wrote to Chancellor Rachel Reeves and Treasury Select Committee chair Meg Hillier, apologizing for the “technical but serious error.” He emphasized the OBR’s vital role in UK fiscal policymaking and the critical need to maintain public confidence, stating his resignation would allow the organization to “quickly move on from this regrettable incident.” Non-executive directors Baroness Sarah Hogg and Dame Susan Rice echoed the report’s conclusion, attributing the ultimate responsibility for the vulnerability and its exposure to the OBR’s leadership over the years.

The leak further fueled accusations that Rachel Reeves had misled the public regarding the state of the UK’s public finances in the run-up to the budget. Opposition leaders, including Conservative leader Kemi Badenoch and SNP deputy leader Pete Wishart, called for Reeves’s resignation, drawing a sharp contrast between Hughes taking responsibility and Reeves’s perceived defiance. Critics alleged that Reeves overstated a “fiscal hole” to justify tax rises, while the OBR’s own forecasts, privately communicated to the Treasury, showed a more optimistic outlook. A timeline of events revealed that by October 31, the OBR’s final forecast, before any policy changes, indicated a £4.2 billion surplus against the chancellor’s day-to-day spending plans, directly contradicting the gloomy narrative Reeves and Prime Minister Keir Starmer presented to prepare the public for tax hikes.

Throughout the budget preparation, the OBR had informed the Treasury of a 0.3 percentage point downgrade in productivity growth, which initially reduced tax receipts by £16 billion. However, this was consistently offset by higher inflation and wages, which boosted VAT, income tax, and national insurance payments. Despite these offsetting factors, Reeves continued to hint at significant tax rises, even delivering an unusual pre-budget “scene-setter” speech on November 4, urging everyone to “contribute.” The plan to increase income tax rates was eventually dropped due to political pressure, with Reeves ultimately announcing £26 billion in tax rises, including a three-year extension to the freeze on income tax thresholds, aiming to double fiscal headroom to £21.7 billion. She defended these decisions by citing the need for economic stability and resilience, despite the OBR’s pre-measures surplus.

Keir Starmer initially criticized the OBR for a “serious error” and a “massive discourtesy” to parliament regarding the leak. However, he defended the substance of the budget, expressing pride in policies aimed at tackling the cost of living, freezing rail fares, boosting the minimum wage, and lifting the two-child benefit cap. Government insiders dismissed the opposition’s attempts to link the OBR leak to the chancellor’s budget decisions, calling them “laughable and totally unserious.” The inquiry’s findings underscore that the OBR’s leadership, over many years, was culpable for the systemic failures in protecting information, inflicting heavy damage on the institution’s reputation. This incident highlights the critical importance of secure information handling for bodies like the OBR, which plays an integral role in independent economic forecasting and maintaining confidence in fiscal policymaking.