You don’t set up a new watchdog unless it at least starts by telling you what you want to hear, and if you’re UK Chancellor George Osborne that means growth (so spending cuts won’t be fatal) but weak growth (so they’re still required):
The Office for Budget Responsibility predicts that the economy will expand 2.6% in 2011, down from the 3.25% estimate given in Labour’s last Budget.
The lower figure will likely increase the impetus of the coalition government to cut public spending, as lower growth means fewer tax revenues.
The chancellor is due to unveil an emergency budget next week.
However, the Office for Budget Responsibility also predicts that the UK’s public deficit will fall, down to 10.5% of GDP in the 2010-11 financial year, from the 11.1% estimated by Labour.
It uses the old Treasury model, anyway. There’s just no politician picking what GDP prediction looks ‘likeliest’ on the fan chart…
(Source: BBC)
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