The Office for Budget Responsibility is expected to downgrade the previous
government’s growth forecasts. Alistair Darling’s rosy prediction that the economy would grow by 3-3.5 percent in 2011 will be replaced by a conservative estimate of 2-2.5 percent, in
line with other independent forecasters. Also, according to the Guardian, the OBR will
‘trim’ the Treasury’s breezy estimates of growth until 2014-15.
There is no guarantee that the OBR’s forecast will be flawless – and the Treasury Select Committee’s scrutiny will have to be exhaustive. But George Osborne is bound to the OBR’s
figures, rather than the Treasury being bound to a political agenda. Balance and responsibility will be restored to Budget decisions.
Political fractions over the economy will turn on the OBR’s figures. Alistair Darling has been making the case that the economy is not as addled as was thought – house prices have recovered, mortgage approvals have risen and borrowing is lower than expected.
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