Housing Unpacked: OBR Row Builds as Budget Scrutiny Intensifies
In the second of our special podcasts following the Budget, Michael Brown from Pepperstone explains how the muted reaction on financial markets could grow louder, what the Bank of England is likely to do next, and why political risk may be the biggest story in 2026.
02 December 2025
A row between the Office for Budget Responsibility (OBR) and the Treasury has dominated the headlines this week.
The Budget itself isn’t unravelling but a detailed discussion about what was said and left unsaid in recent weeks about the size of the black hole puts the Chancellor in an uncomfortable position.
It is a classic question of who knew what and when and one that we explore in the latest episode of Housing Unpacked.
In the second of three Budget specials between now and Christmas, Michael Brown, a research analyst at financial broker Pepperstone, also explains why the economic doom loop could continue into next year, whether raising taxes later in the Parliament will work and how attitudes on financial markets could change as the dust settles on the Budget.
The row escalated on Monday when OBR chairman Richard Hughes resigned following the leaking of its Budget report an hour before the Chancellor got to her feet in Parliament.
With OBR representatives and the Chancellor set to appear before the Treasury select committee this week, the row is unlikely to go away soon.
Away from Westminster, there is early evidence of pent-up demand being released among buyers thanks to a realisation that the Mansion Tax was better than feared.
However, there is still a lingering concern that price thresholds could drop in future and drag more properties into the tax net. That’s after a revaluation process that is far from straightforward. See our full Budget reaction here.
Another risk lurking in the background is that the current government doesn’t survive beyond the next six months and a new Chancellor may want to leave their own mark.
Next May’s local elections will certainly be a difficult moment for the government if the opinion polls are to be believed.
However, if any future Labour administration began increasing the current record-high post-war tax burden, they could also suffer at the hands of the electorate.
Listen to the podcast for Michael’s thoughts on how financial markets would react to a new Chancellor.
