Budget 2018: UK growth forecasts lifted but slow growth lingers

UK economic growth forecasts have been upgraded for the next two years but remain weak compared to other advanced economies are not expected to exceed 1.6% for at least half a decade, according to new official forecasts.

The Office for Budget Responsibility upgraded its forecasts for gross domestic product in for 2019 to 1.6% from the 1.3% pencilled in earlier this year, while the estimate for 2020 was lifted to 1.4% from 1.3%.

Forecasts from the OBR for 2021 and 2022 were unchanged at 1.4% and 1.5% respectively, while a new forecast was unveiled for 2023 of 1.6%.

Even though years of austerity have cut the amount of central government borrowing, the deficit is still not expected to be eradicated by 2023/24, though the OBR predicted it will fall from 1.4% of GDP in 2019 to 0.8% of GDP by then.

Borrowing has fallen more sharply in the first half of the current fiscal year, so the OBR has revised down borrowing £11.9bn.

Public sector net borrowing is predicted to rise from £25.5bn for the current fiscal year to £31.8bn in 2019/20, before falling each year to £26.7bn, £23.8bn, £20.8bn and £19.8bn in 2023/4.