A thinktank economist who warned the government that it needs to safeguard the country’s financial health through the Covid-19 crisis has been earmarked to be the next head of the UK’s tax and spending watchdog.

The chancellor, Rishi Sunak, said Richard Hughes – a research associate at the Resolution Foundation – was his preferred candidate to replace Robert Chote when his second five-year term as chairman of the Office for Budget Responsibility ends later this year.

Hughes, who began his career at the Treasury in 2000 and is also an adviser to the International Monetary Fund, is in line to take over the job of economic and financial forecasting for the government at a time when the economy is on course for its biggest annual slump in three centuries and record peacetime borrowing.

He said: “I am honoured to be nominated to be the next chair of the OBR. It is both a great privilege and a tremendous responsibility to be proposed for this position during one of the most challenging times for the UK economy and public finances in the wake of the coronavirus outbreak.”

In late March, just as the UK went into lockdown, Hughes wrote a paper for the Resolution Foundation – a thinktank that focuses on the needs of those on low and middle incomes – in which he outlined 10 lessons for finance ministries when calibrating their response to the pandemic. These included the need for governments to target support and avoid open-ended commitments.

Hughes said: “In the wake of the coronavirus outbreak, governments have taken unprecedented steps to protect the health of their citizens and support their economies. They now need to take extraordinary steps to safeguard their own financial health through what could be a protracted period of economic disruption necessary to contain and eradicate the virus.” 

Sunak said he had chosen Hughes because it was vital that the UK’s institutions worked effectively to ensure “responsible management of taxpayers’ money” as the government took unprecedented action to deal with the Covid-19 crisis.

Hughes’s appointment to the OBR is subject to approval by MPs on the Treasury committee.