Fresh Budget woe for Labour as Treasury watchdog 'poised to downgrade growth forecasts' because housing targets are going to be missed

See more Daily Mail on Google - save us as a Preferred Source Published: 05:46 EDT, 21 September 2026 | Updated: 06:11 EDT, 21 September 2026 Britain's economic growth forecast could be downgraded by the Treasury watchdog because of Labour's failure to get houses built, an expert has claimed.The Office for Budget Responsibility (OBR) is said to be looking at altering figures provided to the Chancellor ahead of the Budget because of the slow rate of construction.Housing Secretary Angela Rayner has acknowledged there is only a 'slim chance' the Government will meet its target of building 1.5 million homes by the next election. Official estimates suggest Labour's first two years in power saw 392,400 new homes built, less than two-thirds of the required rate.The OBR has previously said that the original target, if met, would add 0.2 per cent to the UK's GDP. But housing expert Neal Hudson said he met OBR officials who were looking at reducing its impact.Downgrading the UK's growth forecast could lead to more government borrowing, which in turn could cause an increase in mortgage rates for homeowners, further depressing the market. The Office for Budget Responsibility is said to be looking at altering figures provided to the Chancellor ahead of the Budget because of the slow rate of construction Housing Secretary Angela Rayner has acknowledged there is only a 'slim chance' the Government will meet its target of building 1.5 million homes by the next election.Mr Hudson told the i Paper the OBR was 'looking at the growth forecast they attached to planning reform' over fears the figure was 'overblown ... the homes will not be built'.Ms Rayner last week told the BBC she would not 'give up' on the 1.5million target, but said international 'headwinds' had made it harder to achieve.Rising building costs and the impact of the Iran war have made meeting the target tougher, Ms Rayner said.Asked whether the Government could deliver on its target, she told the BBC's Sunday With Laura Kuenssberg programme: 'It's a slim chance, but I'm definitely not giving it up.'I think it's really important that we keep a target, that it was always a stretch target.'Last month measures to streamline housebuilding in England were published, with default approval for homes built in 'reasonable walking distance of well-connected stations'.Andy Burnham also announced £10billion for social and affordable homes across England.But he faced accusations he had watered down his previous commitment to spend all £39billion of the Government’s affordable housing budget on council homes. And last week the GMB union warned 500 million bricks are sitting unused at depots across the country, threatening the Government's target on house building.The union said brick manufacturers were either closing or mothballing production, threatening job losses.A Ministry of Housing, Communities and Local Government spokesman said: 'We won't shy away from our stretching target of 1.5 million homes and have seen encouraging signs of progress, with housing starts up 15 per cent as our planning reforms begin to bear fruit - while recognising the challenges the sector is facing with construction costs and macroeconomic headwinds.'The OBR declined to comment ahead of presenting its economic and fiscal outlook alongside the Budget, which is due on October 28.