UK economy set to grow faster than expected

The government’s official forecaster has raised its prediction for UK growth in 2024 and 2025.
UK economy set to grow faster than expected
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The UK’s economy is forecast to grow slightly faster than expected over the next couple of years, the government’s official forecaster has said.

Presenting the Budget, Chancellor Jeremy Hunt said the Office for Budget Responsibility (OBR) now predicts the economy will grow by 0.8% this year, up from its previous prediction of 0.7%.

The forecast for 2025 has also been raised to 1.9% from 1.4%.

“We will soon turn the corner on growth,” Mr Hunt said.

The UK went into recession in the second half of last year and forecasts from the Bank of England and independent economists predicted significantly weaker growth than the OBR’s new outlook.

The expectation of extra leeway from higher growth has allowed the chancellor to outline some giveaways in the Budget – including maintaining a freeze on fuel duty and alcohol duties – without sharply raising borrowing.

With the new measures taken into account the OBR expects borrowing to rise slightly in the next financial year, before remaining broadly in line with previous forecasts.

Overall the country’s debt, measured against the size of the economy, is still set to rise over the next four years, before falling back marginally in the fifth year, thereby meeting one of the fiscal rules the government has set itself. Debt as a proportion of GDP will be 92.9% in 2028-29, higher than it is now.

Source: bbc.co.uk

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