THREE more years of sluggish growth will weigh down on the UK, while the economic recovery across many peer countries also looks set for slowdown, forecasters have said.
Below-trend growth threatens to knock chancellor George Osborne’s deficit reduction plans off track, the Centre for Economic and Business Research (CEBR) announced this morning.
The group estimates that the British economy will expand by just 1.2 per cent this year, and fail to grow by more than two per cent each year from 2012 to 2014.
As a result, the budget deficit in 2015-16 will be £25bn higher than forecast by the government’s fiscal watchdog, the CEBR predicts.
Nonetheless, the group’s economists supported the degree of deficit reductions planned by the coalition.
“It is not an exact science, but the chancellor looks to have roughly the right balance and deserves credit in a difficult environment,” said CEBR chief executive Douglas McWilliams.
Member states across the Organisation for Economic Co-operation and Development (OECD) are facing a “potential slowdown” according to figures released yesterday.