- Oct 28, 2007
- Reaction score
- Political Leaning
The new independent fiscal watchdog has downgraded the economic growth projections for the UK economy.
The Office for Budget Responsibility (OBR) predicts the economy will expand 2.6% in 2011, down from the 3% to 3.5% estimate given in Labour's last Budget.
The lower figure will likely increase the impetus of the coalition government to cut public spending, as lower growth means fewer tax revenues.
Yet the OBR also says the deficit and debt will not be as bad as forecast.
It predicts that the UK's public deficit will fall, down to 10.5% of GDP in the 2010-11 financial year, from the 11.1% estimated by Labour.
For overall net government debt - the sum of all borrowing - the OBR estimates this will decline to 62.2% of GDP in 2010-11 from the previous estimate of 63.6%.
I'll take 2.6 growth most days of the week - and if the Eurozone as a whole continues to struggle and recovery in the US stalls - 2.6 will be excellent against the prevailing tide.