Mr Chote says the biggest and perhaps most important uncertainty is the outlook on productivity growth, which affects earnings, the key driver of income tax levels.

The OBR chairman says the organisation is assuming productivity growth will pick up but not get back to previous highs.

He says the Scottish government approach is to take the UK forecast for earnings and then use its modelling to create Scottish figures, which he says is a sensible approach to take.

Mr Chote says he would be cautious of placing too much weight on the monthly figures from the Office of National Statistics. 

The chairman of the OBR says it is tempting to look at economic forecasts and treat it as a "spot the ball competition".

He says it isn't like that. 

Mr Chote says the differences between the OBR forecasts and the Scottish government forecasts are small. 

Under the terms of the Scotland Act 2016, power to set the rates and bands for Scottish income tax will be devolved from April 2017. 

This power will supersede the existing tax varying power, the Scottish Rate of Income Tax (SRIT), under which any changes to Scottish income tax rates would be applied equally over all tax bands 

In Draft Budget 2017-18, external, the Scottish government proposed to “freeze the basic rate of income tax at 20 per cent.” 

Image source, Getty images

The Scottish Government is also proposing to “freeze the higher and additional rates at 40 per cent and 45 per cent respectively. 

The higher rate of income tax threshold is proposed to increase by inflation to £43,430 in 2017- 18.”1 

Responsibility for LBTT and Landfill Tax were devolved to the Scottish Parliament from April 2015. 

Draft Budget 2017-18 proposes that the rates and bands for LBTT will remain unchanged and that the supplement on purchases of additional residential properties costing over £40,000 will remain at 3 per cent. 

Draft Budget 2017-18 also proposes that the Landfill Tax standard rate will increase.

Image source, SPICE

Mr Chote says it is easy to focus to much on Brexit and forget the underlying uncertainties like productivity performance.

He says there will be "interminable PHD theses" unpicking this.

Office for Budget Responsibility chairman Robert Chote says the last set of forecasts were alongside the Autumn Statement on November 23 and the next will be in March.

Mr Chote says the big picture story of an outlook of relatively steady but standard growth remains in place.

He says the outlook for productivity remains the most uncertain.

Mr Chote says productivity has grown much less quickly than expected which is more pronounced in the UK.

He says the Brexit vote creates its own set of uncertainties.

On 23 November 2016 the OBR published, alongside the UK spending review, its latest Economic and Fiscal Outlook (EFO), external. 

Image source, OBR

The evidence session will also consider the OBR’s latest Devolved Taxes Forecast which covers the following taxes— 

• Scottish Income Tax; 
• Land and Buildings Transaction Tax (LBTT)
• Landfill Tax
• Aggregates Levy
• Air Passenger Duty 

Finance Committee chairman Bruce Crawford welcomes Office for Budget Responsibility chairman Robert Chote.

Image source, PA

During the first evidence session Office for Budget Responsibility chairman Robert Chote will give evidence on its economic and fiscal outlook.

Here is the OBR Economic and Fiscal Outlook Executive Summary, external, for some light reading during the committee.  

First up this morning we will bring you live coverage of the Finance and Constitution Committee as it takes evidence on the budget.

During the first evidence session the committee will take evidence on the Office for Budget Responsibility's (OBR's) economic and fiscal outlook from its Chairman Robert Chote.

The Committee will then take evidence on the revenue proposals from Finance Secretary Derek Mackay.

Good morning and welcome to BBC Scotland's live coverage of the Scottish Parliament on Wednesday 11 January 2017.

First up this morning we will bring you extensive coverage of the Finance Committee as it takes evidence on the Scottish budget. 

The Office for Budget Responsibility (OBR) Chairman Robert Chote will give evidence on its economic and fiscal outlook.

Finance Secretary Derek Mackay will then come before the committee to give evidence on his revenue proposals in his draft budget for 2017-18.

Image source, PA, BBC

This afternoon, portfolio questions will begin featuring justice ministers and will then focus on the culture, tourism and external affairs brief.

The Scottish government will then lead a debate on Scotland’s International Development Strategy.

Scottish Conservative MSP Liz Smith will then lead this afternoon's members' debate on the STEP physical literacy programme.