Sir Alan Budd to quit as head of spending watchdog

The chairman of the Office for Budget Responsibility will step down after just three months in the j

Sir Alan Budd, chairman of the Office for Budget Responsibility, the government's new spending watchdog, will step down in the summer after just three months in the job. The surprise move will leave the OBR without a chairman before it has been formally established in British law.

Sir Alan was on a three-month contract but most in the Treasury had expected him to remain in place until the OBR became a permanent institution. A leading economist and a founding member of the Bank of England's Monetary Policy Committee in 1997, Budd is now expected to return to the private sector.

The OBR was founded by the Chancellor, George Osborne, to provide independent economic forecasts and to judge whether the government is cutting the Budget deficit quickly enough.

The Treasury has no obvious replacement for Sir Alan, which could leave it without a chairman in the run-up to this autumn's Comprehensive Spending Review. "The government will seek to ensure continuity for the OBR in recruiting Sir Alan's successor," said a Treasury spokesman.