LONDON — Chancellor Rachel Reeves has insisted that the government’s new trade deals will boost growth, after the Office for Budget Responsibility (OBR) snubbed a request to count them in its growth forecast.

In its pre-budget forecast on Wednesday, the OBR acknowledged that new trade deals “have the potential to increase U.K. trade and GDP,” including the government’s Brexit “reset” deal with the EU and its free trade agreement with India.

But the budget watchdog indicated that neither of the deals had met the criteria to be included in its forecast.

As elements of the U.K.-EU reset deal were still under negotiation, the OBR said there was “not sufficient detail to assess their potential fiscal and economic impacts.” In the case of the India deal, the OBR said it could be seen to increase GDP by 0.13 percent, in line with the government’s impact assessment, but only once ratified.

When it came to the U.S. trade pact — which saw the U.K. hit with 10 percent baseline tariffs on most goods — the OBR noted that some “details of the future trading arrangement are yet to be negotiated and confirmed.”

The assessments came as a disappointment for Reeves, who had pinned her hopes on trade as a booster for growth.

In an interview with the BBC on Thursday, the chancellor said she was “confident that the growth policies that we’re pursuing will grow our economy,” pointing to trade deals with the EU, India and U.S., as well as planning and pensions reforms.

“Why do I say that?” Reeves added. “Because the OBR said in the spring our economy would grow by 1 percent this year. They revised it up yesterday to 1.5 percent. The IMF, the OECD, the Bank of England, also revised up their growth forecasts for this year.

“So I’ve defied the forecast this year, and I’m determined to defy them next year and the year after, because it is absolutely the case that the best way to fund our public services and keep taxes down is to grow the economy.”

Global headwinds

While the U.K.-EU reset deal and India deal are not included in the OBR’s current forecast, it does offers some hope for the future.

“The result of the UK-EU strategic partnership and the Youth Mobility Scheme are still being negotiated and therefore there is not sufficient detail to assess their potential fiscal and economic impacts,” it said.

“We will consider whether any such impacts should be included in the forecast once the full details of the agreements have been finalised, published and agreed by both the EU and UK. This is the standard approach we have taken to assessing the fiscal and economic impacts of trade deals and other international agreements.”

Once the U.K.-India free trade agreement is ratified by both countries, the OBR said it could increase real GDP by amounts rising to 0.13 percent by 2040, in line with the government’s impact assessment.

But Reeves has less reasons to be cheerful about the state of trade overall, with global trade growth expected to slow from 3.7 percent in 2024 to 2.3 percent in 2026 in line with the IMF’s forecast.

Speaking at a Resolution Foundation event on Thursday, OBR chair Richard Hughes said tariffs and global trade restrictions had played a part in their decision to downgrade productivity.

“There are some new global headwinds in the global economy since our forecast in March — U.S. tariffs going up and also just wider global trade restrictions being put in place,” Hughes warned.

“Trade wars are very bad things for everybody, especially an open economy like the U.K., which relies a lot on trade as a driver for growth so and for the first time that I’ve seen in my career, the IMF is actually forecasting over the next five years trade falling as a share of GDP.”