AUTUMN STATEMENT 2013: Growth forecasts double for 2013
05 December 2013
The Chancellor of the Exchequer was able to confirm an improving economic forecast for Britain as he pledged to continue his fiscal strategy and achieve "a responsible recovery".
According to the independent Office for Budget Responsibility (OBR), the UK economy is now forecast to grow by 1.4% this year, which is more than double the rate of 0.6% that was forecast only eight months ago at the time of the Budget.
Forecast growth in 2014 is also up, to 2.4% from 1.8%, but then will flatten slightly to 2.2% in 2015. However, by 2016/17, the UK economy is expected to be growing by a healthy 2.7%.
The faster than expected growth, resulting in increased tax revenues and lower government costs, mean that underlying government borrowing is now likely to end the year at £111bn, significantly less than the £120bn that was forecast back in March.
It is expected to fall further over the next five years so that, by 2018/19, the UK government will be balancing its books and not running a deficit.
However the Chancellor warned there could be no let-up in the policy of dealing with debt and putting economic stability at risk. The OBR believes there are still risks of further recession in the Eurozone, where the economy is expected to shrink by 0.4% this year.