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UK growth forecasts could be revised again, says Sir Alan Budd
UK growth forecasts have already been revised twice since the government came to power and could be revised again in the autumn, says the man in charge of the newly formed Office of Budget Responsibility.
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New, lower growth forecasts published alongside the Budget were based on assumptions about how the swathe of government spending cuts may affect UK economic output and could be revised again in the Autumn, said Sir Alan Budd head of the Office of Budget Responsibility (OBR).
Asked if there was still scope to cut growth forecasts, Budd (pictured) said: ‘Yes. Or raise them.
'We just don’t have enough information to know one way or the other.’
Budd was speaking to Citywire on the sidelines of an Institute for Fiscal Studies conference on the impact of the Budget.
Budd’s new department has been criticised as its latest forecasts on growth and inflation are seen by many as too optimistic.
Some say the OBR’s forecasts are based too closely on the Bank of England and therefore are not independent. Given the department had only weeks to prepare new forecasts, many are skeptical about their credibility.
The OBR now sees growth at 1.2% this year and 2.3% in 2011 – having taken some account of the massive spending cuts and new taxes announced in yesterday’s Budget.
That is lower than the 1.3% and 2.6% growth it had forecast just last week.
At the conference, Budd had said it was unfair to say he had made a judgement on how the new taxes and spending cuts could affect the UK economy.
He said his growth forecasts were based on an assumption.
‘We cannot make a judgment until we know what the spending cuts will be,’ he said.
The Spending Review, due to conclude in the autumn, will set spending limits for every government department for the period 2011/12 to 2014/15.
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4 comments so far. Why not have your say?
Foggiest
Jun 24, 2010 at 10:06
Elephant in the room - ignore it!
Raising retirement age and cutting benefits to get people back to work -pah! There will never be more jobs than people ever again so why pretend. These measures are, in fact, just ways of spending less on the poor.
report thisFred
Jun 24, 2010 at 11:50
You are obviously true to your name and you are acting with the herd. This government inherited from the "Champions of the Poor" a staggering borrowing bill that has to be re-paid. If you think that soley taxing the "so called rich" is the way out of it, then think again. These are the very people who are best able to avoid an unfair tax regime and they will simply move.
As for all the hoo-ha surrounding the VAT increase, this will have little effect on the responsible, rich or poor. Fresh Food is free of VAT and smoking, drinking and that new state of the art TV are all discretionery purchases. Perhaps scaling back the SKY subscription might help! As for the Child alowance, perhaps if this was spent on the child (remember no VAT on children's clothes) rather than on beer and fags, then this would be a positive. Who knows, if we eat a little less processed food, leave the packet of biscuits on the supermarket shelf and walk occasionally, we might all become a littel fitter and leave a little more cash in the National Health Service as a result.
And before you retort with "the bankers got our money" anthem, just bear in mind that the balance of payments deficit does not reflect one penny of the bailout money which will be paid back by the banks in anycase.
In conclusion, why not spread the pain equally with the poor too? This way, we might in future learn to pay a bit more attention to how the government of the day spends our money and we might all start getting behind the country all the time rather than when X Factor or the World Cup is on the telly!
report thissnoekie
Jun 24, 2010 at 15:17
Thank you Fred and a little effort is required by them that is swigging away having only lifted the finger to pull the ring tag and we will save bringing in more bodies for hospital care and education places to be found, as well as the child allowances and housing benefits, requiring yet more buildings.
With that influx we do get a crim element, and more prison places required and then benefits thereafter.
As I said yesterday, forget the bankers, because they were a small part of the problem, with the feckless borrowers, we need to make the benefit uncomfortable enough for the idle to be incentivised to get into work, and to discourage unsupported breeding. I am of that generation that if you bred, you needed to have the wherewithal to support your issue, not rely on the state for their upkeep and maintenance.
PS, still getting, regularly the "Server Error in '/' Application." and on a reloading, having posted, my original message in the box. The IT people clearly didn't earn their money, in fact should pay us for the waste of time.
report thisStephen Roach
Jun 24, 2010 at 16:56
Of course VAT is discretionary, never mind that cooker or pots and pans etc just cook on a fire n the back yard then eat with your fingers.
Don't bother replacing that broken fridge it'll soon be cold outside again an you can keep things out there.
Washing machine kaput, get yourself down to the river with a couple of big rocks
Need some new clothes? just go naked.
I'm with Fred, not need to waste money when the essentials in life are VAT free.
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