Growth has upset Osborne’s plans — and it’s likely to get worse

The real story, as everyone expected, wasn’t in the Pre-Budget Report ‘Green Book’ — but in the supplementary document produced by the Office for Budgetary Responsibility. Growth forecasts have taken a dive. And while that is both unsurprising and not all that revealing, it carries grim implications for so much else. I mean, just look at the graphs we produced in our last post: forecasts for debt, unemployment and borrowing are all up. It is not a pretty picture.

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But despite the dreariness of it all, I suspect that the numbers are far too optimistic. The clue comes at the start of the OBR report:

‘The central economic and fiscal forecasts assume that the euro area finds a way through its current crisis, but a more disorderly outcome is clearly a significant downside risk. This risk cannot be quantified in a meaningful way, as there are numerous different ways in which such an outcome could unfold.