Ruth Gregory, at Capital Economics, said she expects the level of GDP to be 0.7 per cent lower by the end of this year than was predicted at the October Budget. If this weakness persists in future years, it could lower the chancellor’s headroom by as much as £13bn, erasing that headroom, she said. However, she stressed that the OBR was likely to judge that the current economic weakness is a temporary problem, limiting the damage to the chancellor’s fiscal headroom.