OBR reviews growth, borrowing, inflation and unemployment

| March 23, 2011 | 0 Comments

The Office for Budget Responsibility (OBR) has today delivered its forecasts for British public borrowing, economic growth, inflation and unemployment.

The independent OBR, which was set up by the coalition Government to assess the state of public finances, lowered its 2011 economic growth forecast to 1.7% from its previous estimate of 2.1%.

The latest estimate is in line with analysts’ forecasts and comes after the economy suffered a shock contraction in the fourth quarter of last year.

However, this was attributed to the coldest December for more than a century.

Meanwhile, growth for 2012 is expected to be 2.5% against a previous estimate of 2.6%.

The OBR also said it expects public sector net borrowing to be £146 billion for the current fiscal year - marginally less than the previous estimate of £148.5 billion.

However, in contrast to the Bank of England’s predictions, the OBR does not expect inflation to fall back to the Government’s target of 2% until 2013.

The central bank expects inflation to fall back to target by 2012.

Yesterday, the Office for National Statistics (ONS) announced Consumer Price Inflation (CPI) rose to an annual rate of 4.4% in February – the highest rate since October 2008.

The OBR said inflation would remain between 4% and 5% this year, compared with a previous forecast of 2.8%.

Finally, the unemployment rate is expected to be 8.2% this year - compared with a previous forecast of 8%.

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