You are here: Home - News -

OBR downgrades UK growth forecast to -0.1% for 2012

by: Hannah Smith
  • 05/12/2012
  • 0
OBR downgrades UK growth forecast to -0.1% for 2012
The Office for Budget Responsibility (OBR) has downgraded its outlook for the UK economy.

The OBR revised down the growth forecasts for the UK economy it made in March from 0.8% to -0.1% for 2012, from 2% to 1.2% for 2013, and from 2.7% to 2% for 2014.

It expects to see growth of 2.3% in 2015 and 2.8% in 2016.

The OBR said over-optimism on the strength of net trade was to blame for the downgrades.

It added the economic contraction in 2008-2009 was much deeper than it had originally thought. A 6.3% contraction in GDP was “the largest shock to the economy since World War II,” Chancellor George Osborne said, and this continues to weigh on the productivity of the UK economy.

Osborne said the UK economy is recovering more quickly than its neighbours and is expected to beat growth in France and Germany next year.

The UK emerged from a double-dip recession in the third quarter with better than expected growth of 1% following a 0.4% contraction in the second quarter.

However, Bank of England governor Mervyn King has forecast another contraction in Q4 after the effects of several one-off factors that have boosted output wear off.

Presenting the Autumn Statement, Osborne said the UK is “healing” and there are “no quick fixes” to solve the economy’s problems, to jeers from MPs in the House of Commons.

He added Britain is “on the right track” to recovery, and is no longer “in the danger zone”, but is perceived globally as a safe haven.

“The public know that there are no miracle cures. Just the hard work of dealing with our deficit and ensuring Britain wins the global race,” he added.

 

Related Posts

There are 0 Comment(s)

You may also be interested in