Economics chief Budd quit after Osborne pressure over jobs data

Pressure from chancellor George's Osborne led to the resignation of Sir Alan Budd, head of the Office for Budget Responsibility, says economist Douglas McWilliams.

The news comes as Treasury officials admit the newly formed body made last minute changes to its job forecasts which downplayed the risks from the government's unprecedented spending cuts.

On Wednesday, just two months into the job, Budd (above) said he would not renew his three-month contract. He did not give any further explanation and the decision came after the OBR's initial economic forecasts were criticised for being too optimistic.

McWilliams, chief executive of the Centre for Economics and Business Research, said when the figures were challenged the government tried to pressurise Sir Alan and that he decided 'enough was enough'.

That echoes concerns from other economists that chancellor George Osborne (below) created the OBR to justify his own policy decisions rather than to provide the accurate, independent forecasts. 

McWilliams said: 'Sir Alan was insufficiently radical or had insufficient time to challenge the forecasts emerging from the Treasury model so a set of forecasts emerged which made George Osborne look silly and Alastair Darling look good.'

The first two reports from the OBR were met with incredulity by most economists. The heckling grew louder after the Office published jobs data just ahead of Prime Minster's Questions.

The data predicted 2 million jobs would be created by the private sector over the current parliament far more than have been created in that time-frame in modern history.

It also said only 499,000 jobs would be lost in the public sector but it now transpires that was its second estimate. Its first had said the figure would be 175,000 higher.

The previous government had said job losses in the sector would total 460,000 under its less draconian plans.

During questions. prime minster David Cameron said the data showed fewer jobs would be lost under the new government.