With one year to go until the UK formally leaves the European Union, the British government is trying to keep a spring in its step. The latest economic and fiscal forecasts from the independent Office for Budget Responsibility released today (pdf) forecast that the economy to grow at 1.5% this year, slightly more than was expected in November.
Happy days! Chancellor Philip Hammond stressed that he rejects the “doom and gloom about the state of the nation” from the UK’s main opposition party. (Anti-Brexit members of his own party and others fearing the effects of quitting the EU are pretty gloomy, too.)
But 2018’s mediocre growth upgrade is about the extent of the good news. GDP forecasts for 2019 and 2020 were unchanged while 2021 and 2022 forecasts were cut. “The economy has slightly more momentum in the near term, thanks to the unexpected strength of the world economy, but there seems little reason to change our view of its medium-term growth potential,” the report said.
And even this is an optimistic forecast when compared to the OECD, which published its own forecasts today (pdf). It expects the UK economy to miss out on the momentum propelling the global economy and grow by just 1.3% this year, slower than the rest of the G7.
“Forecasts are there to be beaten,” said Hammond.