By Graham Clews
25 March 2011
Commenting on the Office for Budget Responsibility's downwards revision of its growth forecasts, IFS director Paul Johnson said: ‘[George Osborne] is going to be uncomfortably dependent on the judgments that the (independent) OBR makes over the (unobservable) potential output of the economy.’
The OBR lowered its forecast for this year from 2.1% to 1.7%, and for next year from 2.6% to 2.5%. It added that if growth continues to be over-estimated, the chancellor would miss his goal of eliminating the deficit over the next four years.
Osborne said the drop in this year’s growth rate was due to higher-than-expected inflation, high commodity prices, and adverse weather this winter.
The OBR maintained its prediction that the economy would grow by 2.9% in 2013 and raised its growth forecasts for 2014 and 2015.
25 March 2011
Lower growth forecasts mean the chancellor's deficit plan depends on a strong economic recovery from 2013 onwards, the Institute for Fiscal Studies said.
Commenting on the Office for Budget Responsibility's downwards revision of its growth forecasts, IFS director Paul Johnson said: ‘[George Osborne] is going to be uncomfortably dependent on the judgments that the (independent) OBR makes over the (unobservable) potential output of the economy.’
The OBR lowered its forecast for this year from 2.1% to 1.7%, and for next year from 2.6% to 2.5%. It added that if growth continues to be over-estimated, the chancellor would miss his goal of eliminating the deficit over the next four years.
Osborne said the drop in this year’s growth rate was due to higher-than-expected inflation, high commodity prices, and adverse weather this winter.
The OBR maintained its prediction that the economy would grow by 2.9% in 2013 and raised its growth forecasts for 2014 and 2015.
