The UK's growth forecast will be slashed today

The newly appointed Office of Budget Responsibility will publish its first forecasts today and is expected to say growth will be far less than previous chancellor Alistair Darling had said in his final budget.

Economist Jonathan Loynes at Capital Economics said the new government body will say output will be 2.5% in 2011 - lower than the 3.25% forecast by Darling. The outlook for later years is also expected to be downgraded.

Loynes said the lower growth outlook means debt will likely rise even higher than expected over the coming years meaning the government’s spending cuts will have to be even higher than expected if the deficit is to be brought down as fast as promised.

He calculates that by the end of the 2014-15 budget year borrowing will be around £20 billion higher than was expected back in the March Budget at £95 billion.

Separately, right-wing think-tank the Institute of Economic Affairs (IEA) said the total government debt is actually six times higher than current forecasts.

Ahead of the new growth figures, the IEA said the true size of UK's national debt is £4.8 trillion - if you include public sector pension liabilities and the likely liabilities to be incurred by the government in respect of the banking sector.

Nick Silver, author of the report said: 'Much of the discussion about public spending cuts in the UK is not grounded in reality. The scale of the national debt is substantially worse than acknowledged. Presenting a true picture of the nation’s finances should be a key role of the Office of Budget Responsibility.'

He said reducing public sector pensions and raising the retirement age would help to balance the books.