The Office of Budget Responsibility has improved its growth forecasts and revised borrowing figures downwards, which the chancellor says will see Britain running a small surplus by 2018/19.
Delivering the Autumn Statement today, chancellor George Osborne revealed the OBR’s latest forecasts for the UK economy.
At the Budget in March, the OBR forecast growth this year would be 0.6 per cent. This forecast has more than doubled to an estimated 1.4 per cent.
The independent body then predicts growth of 2.4 per cent next year, up from its earlier forecast of 1.8 per cent.
The OBR then forecasts growth of 2.2 per cent in 2015, 2.6 per cent in 2016, 2.7 per cent in 2017 and 2.7 per cent in 2018.
Osborne said growth is “still not as strong as we would like”, but represents the “largest improvement in economic forecasts” in Budget and Autumn Statements for 14 years.
On employment, the chancellor said the OBR had expected jobs to remain flat, but now says the number of jobs to rise by 400,000 this year.
The OBR expects unemployment to fall from 7.6 per cent currently to 5.6 per cent by 2018.
Borrowing forecasts have also been revised down. The chancellor says borrowing was running at 11 per cent of GDP when the Government came to office.
Osborne says the underlying deficit has now fallen to 6.8 per cent. It has revised down borrowing as a percentage of GDP from 7.5 per cent to 5.6 per cent in 2014. The deficit is then expected to fall 4.4 per cent in 2015, 2.7 per cent in 2016, 1.2 per cent in 2017, with no deficit by 2018/19.