Economists are broadly positive on measures announced in the emergency Budget and are scrambling to revise their own growth forecasts in light of the austerity measures.
George Osborne forecast slower UK GDP growth in the next five years - 1.2% this year and 2.3% 2011, followed by 2.8% in 2012, 2.9% in 2013 and 2.7% in 2014 and 2015. The 2.6% forecast for 2011 is down from the 3%-3.5% estimate made in the last Labour Budget three months ago. Keith Wade, chief economist at Schroders, has reduced his growth forecasts due to the VAT rise. He initially anticipated 2.4% growth in the UK by the end of the year, but has reduced this to 2.2% because the rise was higher than he expected. Wade says the hike from 17.5% to 20% was tough, as he had anticipat...
To continue reading this article...
Join Professional Adviser for free
Signup and gain exclusive members-only insights
- Unlimited access to real-time news, industry insights and market intelligence
- Stay ahead of the curve with spotlights on emerging trends and technologies
- Receive breaking news stories straight to your inbox in the daily newsletters
- Make smart business decisions with the latest developments in regulation, investing retirement and protection
- Members-only access to the editor’s weekly Friday commentary
- Be the first to hear about our events and awards programmes
