Budget 2013: OBR halves UK economic growth outlook to 0.6% this year
The Office for Budget Responsibility (OBR) has halved its expectations for UK economic growth this year.
The OBR predicts 0.6% growth next year, down from the 1.2% the OBR forecast in his Autumn Statement in December.
Osborne blamed a slowdown in global economic growth, pointing out that economic growth in the US and Japan was flat in Q4, while the eurozone contracted by 0.6%, hitting exports, and promised to 'go further' with 'monetary, fiscal and supply side reform' to bolster the economy.
Similarly growth of 1.8% is expected in 2014, down from 2%, 2.3% in 2015 down from 2.7% and 2.8% in 2017, in line with its previous forecast.
Osborne said that government borrowing will rise to £114 billion this year, a big increase from the £99 billion forecast previously and more than last year's £108 billion figure. He said the government now expects to borrow £108 billion next year.
OBR also said the deficit will fall to 7.4% of GDP this year, down from 7.9% this year and 6.8% in 2013/14, down from 6.9% previously stated.
Benchmark 10 year gilt yields rose 0.08%, while sterling rose by 0.13% against the dollar. The FTSE 100 was modestly up by 0.2% at 6,454.39 at 12:45pm.
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