Britain slashes growth forecast to 2.6 percent in 2011

14th June 2010, Comments 0 comments

Britain on Monday slashed its 2011 economic growth forecast to 2.6 percent and cut its public borrowing estimate to 155 billion pounds, according to official data on behalf of the new government.

The growth figure, published by an independent fiscal watchdog set up by British Prime Minister David Cameron's coalition administration, compared with the 3.25-percent expansion which had been forecast by the previous government.

The Office for Budget Responsibility (OBR) added in a statement that British gross domestic product (GDP) was expected to grow by 1.3 percent in 2010, which marked a slight upward revision.

The state borrowing forecast compared with the previous estimate of 163 billion pounds for the current 2010/2011 financial year which covers the 12 months to April 2011.

The new forecasts were published ahead of an emergency budget on June 22 due from British finance minister George Osborne.

Osborne's emergency budget is expected to unveil deep spending cuts and large taxation rises, as the coalition seeks to slash a public deficit which hit a record 156 billion pounds in the 2009/2010 fiscal year.

The OBR also forecast that GDP will expand by 2.8 percent in 2012, followed by growth of 2.8 percent and 2.6 percent in 2013 and 2014 respectively.

The new forecasts do not include the impact of measures recently introduced by Cameron's Conservative-Liberal Democrat government, which last month ousted the previous Labour administration that was led by Gordon Brown.

The coalition has already axed 6.25 billion pounds (7.57 billion euros, 9.11 billion dollars) of "wasteful" public sector spending in May as it sought to cut the deficit.

At the same time, Osborne set up the independent OBR to publish the government's official economic forecasts.

© 2010 AFP

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