THERE will be a quiet revolution in British economic policy today when the first official but independent forecasts for growth and public borrowing are published.

A new Office for Budget Responsibility, headed by Sir Alan Budd, will unveil its initial forecasts at 10am this morning. It is expected to sharply revise down former chancellor Alistair Darling’s growth projections.

Although it is unlikely to quibble with Darling’s 1.25 per cent growth forecast for 2010-11, it is expected to slash the forecast for 2011 from 3.25 per cent to somewhere nearer the independent consensus of 2.1 per cent.

Forecasts for subsequent years will also likely be downgraded from 3.25-3.5 per cent to a little over 2.5 per cent.

This is line with most forecasts, including the latest today from the CBI, which sees growth of 1.3 per cent this year and 2.5 per cent next year.

However, because tax revenues are holding up better than Darling had expected, the OBR is unlikely to hike the projections for public borrowing in 2010-11. It could even trim the existing forecasts. Darling said net borrowing would be £163bn this financial year in his March Budget, but PricewaterhouseCoopers is predicting it will be £155bn while JP Morgan expects a figure of £145bn.

Labour sources last night said they would seize on any reduction in the deficit forecast as supposed proof the coalition has been over-exaggerating the scale of the fiscal crisis to provide cover for ideologically-motivated cuts.

Harriet Harman, acting leader of the opposition, yesterday said: “I think that what the Tories are doing is they’re trying to make out that the deficit is worse than it is as a pretext to go ahead with cuts in public services.”

One Labour strategist last night said the party would launch its “first major attack” since it was sent into opposition, painting the coalition as ideologically-driven cutters and claiming that large deficits are often necessary.

And Darling is expected to demand an official apology from chancellor George Osborne, although coalition sources last night indicated one would not be forthcoming. Sources close to the ex-chancellor said he was furious at what he sees as Tory attempts to trash his reputation.

Meanwhile, Osborne will flesh out plans for an overhaul of the tripartite regulatory system at his first Mansion House speech on Wednesday. He is expected to unveil proposals to hive off the parts of the FSA that monitor banks, insurers and other financial firms and turn them into a semi-autonomous subsidiary of the Bank of England. A Financial Policy Committee will also be created, charged with maintaining financial stability.