In a letter to the Treasury Select Committee, Mr Hughes clarified that as of 31 October, the Chancellor maintained a fiscal buffer of £4.2 billion. Despite a forecast downgrade in productivity – which some reports suggested would leave a £20bn “black hole” – surging tax receipts caused by inflation had more than covered the £16bn gap.

The OBR’s intervention follows an “unusual volume of speculation” and rogue briefings from the Treasury which caused significant market volatility.

On 31 October, the OBR forecast confirms the Chancellor has met her targets. On 4 November, Ms Reeves delivers a “scene setter” speech at Downing Street, warning of the poor state of public finances and heavily implying a hike to income tax.

Following the speech, media reports suggested a U-turn on the income tax hike was due to “better than expected forecasts”. However, the OBR insists the Treasury possessed these figures by Halloween. Independent economist Julian Jessop supported this view, noting that “unless something very unusual has happened”, favourable assumptions would have been included in the forecast round ending 31 October, City AM reports.

The conflicting narratives sparked panic in the markets. The yield on 10-year gilts – the benchmark for government borrowing costs – initially edged down following Ms Reeves’s speech but rose sharply following the chaotic messaging regarding the tax U-turn. While the eventual Budget doubled fiscal headroom, gilt yields have failed to recover to the levels achieved before the controversy.

Mr Hughes stated he is writing to committee chair Meg Hillier to “set out the facts” regarding the forecast evolution. Hillier has called for the letter to be released “as soon as possible”. A Treasury spokesman declined to comment on the process, stating only that the Budget focused on cutting debt, waiting lists, and the cost of living.