The OBR may downgrade its economic growth forecast because Labour is unlikely to meet its target of building 1.5 million homes by the next election. Such a revision could increase government borrowing and potentially push up mortgage rates, further weakening the housing market.

About 392,400 homes were built during Labour’s first two years in office, below the pace required to meet the target. The OBR previously estimated that achieving it could add 0.2% to GDP, but housing expert Neal Hudson said officials were reconsidering that estimate. The Government cited planning reforms and a 15% rise in housing starts, while acknowledging higher construction costs and wider economic pressures; the OBR declined to comment before the 28 October Budget.