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NIESR: The OBR’s Economic and Fiscal Outlook
The National Institute of Economic and Social Research comments on the OBR’s latest Economic and Fiscal Outlook.
The Office for Budget Responsibility has updated its forecasts for the economy and the public finances.
The very robust growth seen in the second and third quarters of this year have led the OBR to revise up their projection for GDP growth for this year from 1.2 to 1.8 per cent. Their forecast for next year has been revised down from 2.3 to 2.1 per cent per annum.
We think their projection for GDP growth next year is still too strong given the weak prospects for Europe. The OBR calculates the chance of the economy contracting next year is around 1 in 10. We think the chance is closer to 1 in 6.