When I was much younger, and cinemas had hundreds of seats, and also had balconies, a line that regularly appeared in Westerns and other action films was: “I don’t like it, it’s too quiet.” Though I wasn’t around in 1939, some say its first use was in that year’s Drums Along the Mohawk, directed by John Ford and starring Henry Fonda and Claudette Colbert.

Before leaving younger readers completely baffled, the phrase came to mind because on Tuesday the official forecaster, the Office for Budget Responsibility (OBR), will publish a new assessment of the economy and the chancellor will make a House of Commons statement in response to it. And yes, things have been very quiet in the run-up to it.

Contrast that with a year ago when the approach of a new OBR forecast, and an accompanying spring statement from the chancellor, was a time of shredded nerves, panicky financial markets and fears of more tax increases. In the event, Rachel Reeves responded to a threatened loss of headroom against her fiscal rules from the OBR by announcing cuts in disability benefits, though those cuts did not last beyond the summer.

So why are things quiet this time? Have we lulled ourselves into a false sense of security and are we about to be ambushed, or are they quiet for a reason?

There are actually a few reasons for the lack of excitement. One is that quite a short time has passed since the OBR’s last forecast, which was published and accidentally released early, on the day of the November 26 budget last year. Unless something dramatic had happened over that period, which it has not, you would not expect all that much to change in its forecast.

It is also the case that the economy always gets more attention, including in the media, when it is doing badly rather than when things are improving. Now that inflation is coming down, as are interest rates, and survey evidence points to a strong start to 2026, the bad news story is weaker than it was, except when it comes to unemployment.

• Spring forecast will show value of stability — long may it last

That, and the fact that the OBR lacks a chairman following Richard Hughes’s honourable resignation as a result of the unintentional leak, argues for something of a “steady as she goes” forecast. The OBR will be without a chairman for a while yet. The recruitment process was launched only on February 20 and candidates have until March 26 to apply. I am not sure that the government will be inundated with applications.

A more important reason why this is not like a year ago is that the chancellor has made clear that Tuesday will be an economic update, not a fiscal event. She has said that there should be only one budget a year, in the autumn, and no mini ones in between.

That should work this year. The Treasury will by now have a very good idea about what the OBR will say this week and there has been no sense of panic, no suggestion that action will be needed. All is calm. Whether the chancellor’s fiscal purity could be maintained if in another year the OBR came through with a spring update that revealed a massive new budget hole to be filled remains to be seen. But that bridge does not have to be crossed this week.

Spring statements in the past have indeed been mini budgets, and some not so mini, but that is not the intention this time. When the date of this week’s economic update was announced, the wording was clear: “The government will respond to the March forecast through a statement to parliament, in line with the government’s commitment to deliver one major fiscal event a year at the budget.” You know the kind of thing; picking out the best bits and ignoring those that are not so good, with maybe one or two small announcements, which chancellors can never resist.

• Rachel Reeves v Robert Jenrick is the real economic battleground

Related to this, another reason for the quiet is that the air of permanent crisis that dogged Reeves for most of her first 18 months as chancellor has subsided — at least for now. The truce between the Treasury and the market for UK government bonds — the gilt market — has largely persisted since the November budget.

The ten-year gilt yield, the interest on government debt, nudged 4.9 per cent in January last year and was 4.8 per cent as recently as last autumn, but has lately been closer to 4.3 per cent. Markets were reassured by the chancellor’s decision to give herself nearly £22 billion of headroom at the end of the decade against her main fiscal rule in the November budget, a decision that may pay further dividends if the cost of government borrowing continues to ease back.

The fall in the cost of government borrowing, together with the fact that the public finances have suddenly come good, with this year’s running total coming in below the OBR’s forecast, could mean that this week’s assessment will see an increase in that headroom, according to some economists. It will not be a huge surprise if the headroom in 2029-30 is lifted to £24 billion-£25 billion, and it is quite a long time since things moved in that direction. But the OBR could revisit aspects of its forecasts, including its predictions for net migration to the UK, in its autumn assessment, which could shift things back the other way.

• Gilts on a roll as ‘dull’ start to year gives Rachel Reeves a boost

For now, though, the OBR always thought that there would be a tax bonanza in January, but it was even bigger than it expected. Overall government receipts rose by 13.8 per cent between January 2025 and 2026, with income and capital gains tax (CGT) receipts up by 21.2 per cent.

I can remember people reporting a few months ago that CGT receipts were depressed, without realising that they come through with a lag, January’s boom partly reflecting disposals in the run-up to the October 2024 budget. The budget surplus in January, £30.4 billion, was the largest monthly figure since records started in 1993.

Markets, of course, must keep an eye on UK politics as well as economics, and there have been times in the past few weeks where fears of political instability have emerged. Markets believe that the devil they know, the team of Sir Keir Starmer and Reeves, is more likely to keep a lid on government borrowing than any of the Labour alternatives.

Even the suggestion that Andy Burnham was seeking an early return to parliament to possibly challenge Starmer for the top job was enough to produce a gilt market wobble. The market has not yet begun to seriously contemplate the scarier prospect of what might happen to the public finances if the Green Party or Reform UK were to oversee them.

The state of UK politics means that, despite the expected lack of fireworks this week, it is too soon to think that smooth progress is guaranteed from now on. The next hurdle after the Gorton & Denton by-election will come in May, with local government, Scottish and Welsh elections. Things may be quiet for now, but there is no guarantee they will remain so.

PS

Confidence is key, and consumers have not yet signed up to the good start to the year — including a January jump in retail sales — evident from business surveys. Of all the consumer confidence reports, the one I follow most is that produced by GfK, and its consumer confidence barometer fell by three points to -19 last month, according to figures published on Friday.

Consumers are more downbeat about their own personal financial situation over the next 12 months and do not think that this is a good time to make major purchases. They are also downbeat about the economic outlook for the next 12 months, though no more so than they were a month earlier.

One thing that looks to have undermined confidence is the rise in the unemployment rate to 5.2 per cent, which has led to an increase in job insecurity. That is fair enough. Though the rise in the unemployment rate is largely balanced by a fall in the rate of economic inactivity (people who are outside the workforce), the job market has clearly cooled and there has been a fall in payroll jobs.

• Is unemployment still the price we have to pay for low inflation?

There has also been a rise in the number of young people who are Neets (not in employment, education and training), officially confirmed at 957,000 in the final three months of last year. That, as the Work Foundation points out, is one in eight young people aged between 16 and 24, and this gets mentioned to me a lot. It has cut through. When even good graduates are finding it very tough to get jobs, it is not surprising that there is a sense of unease.

david.smith@sunday-times.co.uk