U.K. growth forecast cut
Chancellor of the Exche
quer George Osborne unveiled a cut in the
government’s economic
growth forecasts and said
the budget deficit will take
longer to tame than he originally planned.
Forecasts from the Office for Budget Responsibility show the economy will shrink 0.1 per cent this year instead of the 0.8 per cent growth predicted in March, and expand 1.2 per
cent next year instead of 2
per cent, Osborne said in
his autumn statement to Parliament. He extended his fiscal consolidation by one year to the 2017-18 fiscal year and said he will miss his target to start cutting debt as a percentage of gross domestic product in 2015 by a year.
The announcement drew attacks from the opposition Labour Party, which says he
is damaging the economy
by trying to cut the deficit too quickly.
The chancellor is already struggling to rebuild his
reputation after a decision to cut income taxes for the highest earners in his March budget and a series of policy U-turns cost his Conservative Party support
with voters.
“While our deficit is fore
cast to go on falling, instead of taking three years to get
our debt falling, it’s going to
take four,” Osborne said.