The financial markets faced turmoil yesterday after a pivotal analysis of Rachel Reeves’ policies was leaked prior to her scheduled address in Parliament, allowing City traders to seize an opportunity.

Significant fluctuations were observed in both the pound and UK government bonds following the early release of economic predictions by the Office for Budget Responsibility (OBR), nearly an hour before the Chancellor was set to present her financial strategies to Members of Parliament.

The OBR customarily discloses its forecasts post-Budget announcement, leaving frustrated MPs in the Commons without the crucial document, which was, by then, circulating widely beyond the Chamber’s confines.

Laith Khalaf, an economist at investment firm AJ Bell, likened the premature disclosure, coupled with other policy leaks leading up to Budget day, to “watching Match of the Day already knowing the scores,” diminishing the impact of Ms. Reeves’ address.

While the leak led to disarray within Parliament, it also presented lucrative opportunities for traders in the financial district who were keenly observing market movements.

Nick Lawson, head of merchant bank Ocean Wall, commented, “Virtually anyone involved in sterling rates or currency markets could have potentially capitalized on the chaotic early leak of the Budget.”

Critical information: A key analysis of Rachel Reeves’ measures leaked before she even stood up for her speech in Parliament – enabling City traders to cash in

He said among those most poised to benefit from the wild swings would have been so-called ‘macro’ hedge funds, which make their money by betting on market movements caused by political and economic events.

Funds like these were big winners during the Brexit referendum when the Leave result caused the value of the pound to drop sharply.

Other possible winners were high-frequency trading firms, which use computer algorithms to make large numbers of trades extremely quickly, sometimes in fractions of a second, to stay ahead of competitors.

‘The Chancellor will certainly have been looking to give financial markets a silver lining to hold on to. But this won’t have been what she had in mind,’ Mr Lawson added.

The erroneous leaking of its forecasts threatens to deal a heavy blow to the OBR’s reputation, with the financial watchdog previously accused of wielding too much power over the government’s spending plans.

OBR chairman Richard Hughes told reporters that the forecast documents were ‘uploaded onto our website too early’ and that an investigation had been launched to uncover the reason behind the leak.

Pressed on whether he would resign, he said: ‘I will abide by the recommendations. I always serve so long as I have the confidence of the Chancellor and the Treasury committee.

‘We take it very seriously which is why we’ve initiated an investigation. At the moment, we understand how it happened but we want to get to the fundamental causes and make sure it doesn’t happen again.’

Asked about whether anyone had been disciplined, he said the OBR had been focused on its forecast, adding: ‘It was a mistake in the OBR. We have apologised for it. It’s not something which we like to happen. It was an accident.’

Last night a spokesman for the Chancellor said she still had confidence in Mr Hughes.

Sterling briefly spiked higher to nearly $1.32 against the dollar in the minutes after the leak as currency traders seized on signs the Chancellor had built herself more headroom.

However, it then plunged lower as international investors fretted over the outlook for the UK economy, before rebounding once again and passing $1.322 in late afternoon.

These movements were mirrored on bond markets, where yields rise when prices fall.

Yields on ten-year bonds – a key measure of how much it costs the Government to borrow – dropped to 4.43 then surged to 4.54 within minutes before eventually falling back again.

Mr Khalaf, head of investment analysis at AJ Bell, said the wild swings had been sparked by traders being caught ‘on the hop’ by the leaked OBR data.

He added that ‘The Chancellor was left with a depleted squad of fresh announcements in the Commons. 

‘Then the OBR capped this off by publishing their economic report early. Most likely a fumbled mistake, but you could not make this stuff up,’ he said.

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