2026-03-03 19:16
publication
2026-03-03 19:16
The Office for Budget Responsibility (OBR) has lowered its forecast for this year's economic growth in the UK from 1.4%. up to 1.1 percent GDP, but slightly increased it for the next two years – Finance Minister Rachel Reeves announced on Tuesday.
“This government has the right economic plan for our country,” Reeves said as he presented the spring budget report to the House of Commons. She added that there was no doubt that the UK had the ability to “overcome the challenges we face”.
According to the OBR forecasts she cited, economic growth is expected to be 1.1% this year, not 1.4%, as the office predicted in November last year, while in 2027 and 2028 the economy is expected to grow by 1.6%, not 1.5%. Forecasts for the next two years – 2029 and 2030 – have not changed and the growth is expected to be 1.5 percent each.
Reeves argued that thanks to this, by the end of the current parliamentary term, i.e. until 2029, GDP per person after taking into account inflation will increase by one thousand pounds.
As for inflation, it will fall faster than forecast in November and should reach the Bank of England's inflation target of 2% before the end of this year. The OBR predicts that inflation will fall from 3.4% on an annual average basis. in 2025 to 2.3 percent this year and 2 percent. in 2027
This year, unemployment will increase to 5.3 percent, which is higher than the peak in the November forecast, according to which it was to be 4.9 percent, but will later begin to decline – to 4.1 percent. in 2030
The OBR also predicts that the budget deficit will continue to decline – this year it will amount to 4.3%. GDP, and in the following years 3.6 percent, 2.9 percent, 2.5 percent, up to 1.8 percent. in 2030.
The forecasts published on Tuesday do not yet take into account the economic effects of the conflict in the Middle East after the US-Israeli attack on Iran, or the new tariffs announced by US President Donald Trump a few days earlier. (PAP)
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