Dicks queries deficit plan

A FORMER member of George Osborne’s independent economic agency warned that the UK was likely to miss targets for cutting the public budget deficit yesterday.

Geoff Dicks, an economist at brokerage Novus Capital Markets and an initial committee member at the Office of Budget Responsibility, said weaker-than-anticipated growth in UK productivity meant GDP growth targets were likely to be missed, and would leave the deficit larger than expected. Dicks calculated that UK productivity growth, or output per hour worked, was currently about 1.5 per cent, below the OBR’s forecast for two per cent underlying growth.

“The weakness of productivity growth in the recovery so far is telling us not just that productivity has been lost but that its rate of growth from here on could also be below the two per cent that we take as ‘constant’,” he told the Financial Times.