Magazine article Public Finance

Numbers Game

Magazine article Public Finance

Numbers Game

Article excerpt

Growth is still the big problem for George Osborne as he searches for ways to boost the economy and get the public finances back on track.

The chancellor announced in the March Budget that GDP growth for 2013 was likely to be only 0.6% - half the level estimated in the Autumn Statement in December 2012. The forecast for 2014 was also revised down from 2.0% to 1.8%.

He was forced to admit that the likelihood of hitting the supplementary target - debt falling as a share of GDP by 2015/16 - had 'deteriorated'. It will not start falling now until 2016/17.

Osborne avoided complete humiliation by asserting that net borrowing is falling and that a triple-dip recession will be avoided. But the margins are very close for comfort.

The chancellor quoted Office for Budget Responsibility figures in his speech on March 20. These showed actual borrowing of £121.0bn in 2011/12, with estimates of £120.9bn for 2012/13 and £120bn for 2013/14.

Borrowing is technically on a downward trajectory, but the £100m difference between 2011/12 and 2012/13 was described by the OBR as 'statistically insignificant'. …

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