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05/12/2012
Osbourne Says Economy Is 'Weaker Than Expected'
Despite warning that he now plans to extend austerity measures until 2017-18 Chancellor George Osborne has insisted the British economy is "on track".
As he delivered his autumn statement the chancellor insisted there were "no quick fixes" for the economy, saying the Office for Budget Responsibility was now predicting a contraction of 0.1% in 2012, down from the growth of 0.8% it forecast alongside the chancellor's March budget.
He said: "It's taking time but the British economy is healing," he told MPs. The independent forecasting body also slashed its forecast for GDP growth next year to 1.2%, down from 2%.
“Despite the weaker-than-expected outlook, however, the chancellor reaffirmed his determination to press ahead with the coalition's deficit-cutting strategy, insisting that, "turning back now would be a disaster".
The OBR has judged that Osbourne now looks likely to miss his promise that the national debt would be falling by 2015-16. Instead, they believe debt as a share of GDP will now peak at 79.9% in 2015-16, instead of 76.3%, a year earlier, as it predicted in March.
However, the OBR's assessment does show the government meeting Osborne's other target, the so-called "fiscal mandate", of balancing the budget over the next five years.
The deficit is expected to fall as a share of GDP over the coming five years, from 6.1% this year, to 1.6% in 2017-18. It was previously expected to be just 1.1% by 2016-17.
"The deficit is still far too high for comfort; we cannot relax our efforts … the road is hard, but we cannot relax our efforts", he told MPs.
"This government has shown that it is possible to restore sanity to the public finances, while improving the quality of the public services."
(H/GK)
As he delivered his autumn statement the chancellor insisted there were "no quick fixes" for the economy, saying the Office for Budget Responsibility was now predicting a contraction of 0.1% in 2012, down from the growth of 0.8% it forecast alongside the chancellor's March budget.
He said: "It's taking time but the British economy is healing," he told MPs. The independent forecasting body also slashed its forecast for GDP growth next year to 1.2%, down from 2%.
“Despite the weaker-than-expected outlook, however, the chancellor reaffirmed his determination to press ahead with the coalition's deficit-cutting strategy, insisting that, "turning back now would be a disaster".
The OBR has judged that Osbourne now looks likely to miss his promise that the national debt would be falling by 2015-16. Instead, they believe debt as a share of GDP will now peak at 79.9% in 2015-16, instead of 76.3%, a year earlier, as it predicted in March.
However, the OBR's assessment does show the government meeting Osborne's other target, the so-called "fiscal mandate", of balancing the budget over the next five years.
The deficit is expected to fall as a share of GDP over the coming five years, from 6.1% this year, to 1.6% in 2017-18. It was previously expected to be just 1.1% by 2016-17.
"The deficit is still far too high for comfort; we cannot relax our efforts … the road is hard, but we cannot relax our efforts", he told MPs.
"This government has shown that it is possible to restore sanity to the public finances, while improving the quality of the public services."
(H/GK)
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