2011 growth unlikely to hit Treasury target
By Alex Stevenson Follow @alex__stevenson
Britain's economy is unlikely to grow as quickly as the government had predicted in 2011, the Office of Budget Responsibility's (OBR) has said.
Robert Chote, chairman of the OBR, doubted his watchdog's 1.7% target for GDP growth after the first half of the year failed to meet expectations.
The first and second quarters of the year saw GDP growth of 0.5% and 0.2% respectively, which the Office for National Statistics (ONS) blamed on a series of one-off factors.
"Back in March our central forecast was for 1.7 per cent growth this year, which at the time was fractionally more pessimistic than the average of the outside forecasters," Mr Chote said in an interview with the Independent newspaper.
"As a simple matter of arithmetic, in order to get to 1.7 per cent now you'd be looking for quarter-on-quarter growth rates of 1 per cent in the second and third quarters of 2011, and there aren't many people out there expecting that."
Chancellor George Osborne set up the OBR as an independent body to make forecasts about the UK economy's future prospects.
When in opposition the Conservatives had suspected the New Labour government of being overly optimistic, reflected in a series of embarrassing downgraded growth forecasts.
Mr Osborne is likely to make the fourth successive downgrading of his own when he makes his autumn statement later this year.
Shadow Treasury minister David Hanson said the chancellor was "complacent and out-of-touch". He said missing 2011's growth forecasts would be "bad news for families and businesses".
"George Osborne must now recognise that his tax rises and spending cuts which go too far and too fast have choked off last year's recovery," he said.
"He has left us in a weak position if things now go wrong in the eurozone and America."
Prospects for the third quarter are mixed, Mr Chote said.
"There are various indicators saying the third quarter will be relatively weak, but on the other hand there were special factors in the second quarter so there may be bounce-back there," he added.
"There are potential pressures in both directions."
