Faster economic growth forecast

CHANCELLOR George Osborne yesterday predicted that the UK economy would grow more quickly this year than previously forecast, although a leading economist warned that this wasn’t a cause for celebration.
By The Newsroom
Published 22nd Mar 2012, 06:00 BST

The independent Office of Budget Responsibility (OBR) forecasts growth of 0.8 per cent in the UK this year, compared with its autumn estimate of 0.7 per cent.

Mr Osborne also revealed that borrowing this year is set to come in at £126bn, £1bn lower than forecast in the autumn.

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Howard Archer, the chief UK and European Economist from IHS Global Insight, said: “In recent times, a UK Chancellor has repeatedly had to prepare his budget against a backdrop of reduced GDP growth forecasts and projected weaker public finan-ces.

“This (announcement) is of welcome relief to the Chancellor and spares him having to tighten overall fiscal policy further in this budget following the additional measures that were introduced in last November’s Autumn statement.

“Having said that projected GDP growth...is still worryingly weak and hardly a matter for celebration.”

Ian Stewart, Deloitte chief economist, said: “The margin for error in reducing the UK’s still huge deficit over the next five years is small and dependent on the unpredictable path of growth. There’s still a long haul ahead for the UK economy.”