UK GDP growth slashed to 2% for 2016

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The Office for Budget Responsibility has slashed its forecast for UK GDP growth in 2016 by 2 per cent, Chancellor George Osborne has revealed in the Budget.

The downgrade is greater than anticipated. Last week the British Chambers of Commerce downgraded its growth forecast for the UK economy from 2.5 per cent to 2.2 per cent.

In November’s Autumn Statement the projection for 2016 was 2.4 per cent, an upgrade from last year’s budget when the OBR forecast a growth rate of 2.3 per cent for 2016 and the following two years.

Growth figures for 2017 have also been reduced. According to the OBR, growth for 2017 will be 2.2 per cent, with a growth rate of 2.1 per cent for the following three years.

However the Chancellor maintained that: “The economy is set to grow faster than any other major advanced economy in the world.”

Figures released this morning by the Office for National Statistics show UK unemployment fell by 28,000 to 1.68 million between November and January. The rate of unemployment was unchanged at 5.1 per cent.

There was a marginal pick up in wage growth, from 2 per cent to 2.2 per cent, but the sluggish growth was another indicator of a downgrade to UK growth.