PBR 2007: Official growth forecasts trimmed, but chancellor still optimistic
Insistence that the economy will grow by 3% this year, and faith in the budget’s later-year forecasts, soften the blow of conceding that growth could drop below the 2.5% trend in 2008.
The economy’s growth rate stayed at 3% y-o-y in H1, in line with recent trends and Treasury forecasts. Although most forecasters expect H2 growth to be slower, the Chancellor has kept his full-year projection at 3%. This enables Darling to repeat his predecessor’s much-loved refrain that the UK is outgrowing most other large EU economies, and even set to move ahead of the US for full-year 2007.