How much trouble is George Osborne in? We don’t need to wait until his mini-Budget tomorrow, we already know most of it. And we’ll enter that peculiar Budget game, where the already-known is restated and treated like news. CoffeeHousers might like to get ahead of the curve.
Growth evaporating
The Office for Budget Responsibility will have to follow the other economic forecasters and downgrade its growth forecasts for 2012 and 2013 (again). The Treasury collects independent forecasts monthly, and here’s how the picture has deteriorated since March:
Although the OBR significantly downgraded its forecasts for 2012 and 2013 last year, it hasn’t ever done so for its longer-term forecasts for 2014-16. But it will have to now, probably from around 3 per cent to 2 per cent.
Deficit forecasts up
A slower recovery means lower tax receipts, higher benefit spending and bigger deficits. The nugget of good news for George Osborne is that the government borrowed a little less last year than the OBR thought it would — £121.4
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