So the IMF has revised its forecasts for the UK’s GDP growth downwards — to 0.2 in 2012 and 1.4 in 2013 from the 0.8 per cent and 2.0 respectively it predicted in April. It’s bad news, certainly — not least because we’ve been downgraded more than most other countries, and we’re now forecast to grow more slowly than Germany and (this year) France. But it’s worth bearing in mind that the IMF — for all its ability to drive headlines — is just one of many organisations playing the forecasting game, and these downgrades actually just bring them into line with the average.
What’s worrying for George Osborne — and his fiscal consolidation programme — is that the average is moving further and further below the OBR’s growth forecasts, upon which all of the public finance predictions are made. This means that, unless things change for the better in the next few months, we can expect yet another downgrade in November — a gloomy backdrop for Osborne’s autumn statement.
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