The government’s fiscal watchdog has downgraded its economic growth forecast.
The Office for Budget Responsibility believes the economy will grow two per cent this year, 2.2 per cent in 2017 and 2.1 per cent in each of three years after, chancellor George Osborne said today
In November it forecast growth of 2.4 per cent in 2016, 2.5 per cent in 2017 and 2.4. per cent in 2018.
Osborne said the downgrade was due "turbulence in finance markets", weaker growth in the developed world and weaker productivity growth.
Due to the economy being smaller in than previously thought in nominal terms – not adjusted for inflation – the national debt as a percentage of GDP has been hiked.
National debt is set to be larger in the year ending 31 March 2016 (2015-16) than the year before. It will then be 82.6 per cent in 2016-17, 81.3 per cent in 2017-18 and 79.9 per cent in 2018-19. These are up from 81.7 per cent, 79.9 per cent and 77.3 per cent, respectively.
The budget deficit, the amount borrowed in a single year, is revised up for the next three years, but Osborne still achieves a surplus by 2020.