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Budget 2011: Osborne slashes UK growth forecast

by: IFAonline
  • 23/03/2011
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Budget 2011: Osborne slashes UK growth forecast
The UK economy will grow by 1.7% this year, significantly below previous estimates, George Osborne announced today.

The lower-than-expected growth figures are due to weak Q4 figures last year, a rise in world commodity prices and higher-than-expected inflation, the Chancellor said.

The independent Office for Budget Responsibility (OBR) had earlier forecast 2.1% growth this year and 2.6% in 2012.

Opening his Budget speech, Osborne said the OBR now expects growth of 2.5% in 2012, 2.9% in 2013, 2.9% in 2014 and 2.8% in 2015.

He added inflation will likley remain between 4% and 5% this year, 2.5% in 2013 and 2% in 2014.

Elsewhere, he said borrowing will be £146bn this year, £122bn next year, and £111bn the year after that, falling to £29bn by 2015/16.

Osborne said today’s Budget would not be not a tax-raising Budget, but nor would it be a “give-away”.

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