The City watchdog is urged to investigate claims the Treasury misled the public on the fiscal challenge Rachel Reeves faced ahead of this week’s Budget.
The Scottish National Party (SNP) asked the Financial Conduct Authority (FCA) to investigate allegations of "deliberately false and misleading" briefings regarding a £20 billion black hole in the public coffers.
The letter coincides with an escalating controversy surrounding pre-Budget rumors that the Chancellor's expenditure plans were seriously lacking, in part due to a reduction in productivity projections.
When Ms. Reeves said in a speech on November 4 that tax increases were necessary because slow productivity growth would have "consequences for the public finances," she fueled that conjecture.
The Office for Budget Responsibility (OBR) said on Friday that it has notified the Chancellor, despite warnings that the gap may reach £20 billion.
SNP Westminster leader Stephen Flynn questioned whether Ms. Reeves's speech on November 4 constituted "market manipulation" and blamed the Treasury for briefing about a "fake" £20 billion black hole in his letter to the FCA.
He demanded an
"immediate investigation into the accusations of false and deeply misleading Budget briefings emanating from a UK Treasury led by the Chancellor Rachel Reeves,"
calling the budget "built on a lie."
Regarding Mr. Flynn's letter, the FCA declined to comment.
A Treasury spokesperson said:
“We are not going to get into the OBR’s processes or speculate on how that relates to the internal decision making in the build up to a Budget but the Chancellor made her choices to cut the cost of living, cut hospital waiting lists and double headroom to cut the cost of our debt.”
Which officials might be held accountable over the Budget disclosures?
Treasury Permanent Secretary James Bowler could face scrutiny for overseeing the internal leak inquiry into the Office for Budget Responsibility( OBR) exposures, as he launched the inquiry following the unseasonable release of downgraded growth vaticinations and financial pitfalls ahead of Rachel Reeves' November 2025 Budget.
Bowler, as the account officer, bears responsibility for icing accurate public dispatches on financial headroom, which critics claim understated borrowing pressures and an implicit £41bn gap.
OBR president Richard Hughes has entered public backing from Chancellor Reeves amid counterreaction over the early budget leak, which revealed a" razor-thin" £9.9 bn headroom eroded by request volatility and cast crimes.