Belfast Telegraph

Friday 11 July 2014

Economic struggle set to last for years

George Osborne was forced yesterday to acknowledge a grim picture of declining growth and rising unemployment for the UK over the coming years.

Unemployment was forecast to increase from 8.1% this year to 8.7% in 2012 before falling back to 6.2% by 2016.

And the Office for Budget Responsibility (OBR) warned that 600,000 jobs could be lost in the public sector by 2015/16 - a dramatic 50% increase on its previous estimate of 400,000. By the following year, that number could have reached 710,000.

The Chancellor insisted he was still on course to meet his key targets of eliminating the UK's structural deficit within five years and getting national debt on a downward course as a proportion of GDP by 2015/16.

But his Labour shadow Ed Balls said the economy was flatlining and the country was suffering "all of the pain and none of the gain" at the government's hands.

The OBR forecasts announced in yesterday's Autumn Statement put growth at 0.9% for this year and 0.7% for 2012 - sharply downgraded from 1.7% and 2.5% in the body's last forecasts at the time of the March Budget.

Growth is then expected to pick up to 2.1% in 2013, 2.7% in 2014, and 3% in 2015 and 2016.

The government is set to borrow £111bn more over the next five years than previously expected, with borrowing peaking at £127bn this year before declining to £53bn by 2015/16.

Mr Osborne announced a package of growth measures intended to boost GDP by encouraging investment in infrastructure, small companies and the regions and getting young people into work.

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