Government set to borrow £11bn less
Pressure on the public finances will be less severe than previously thought, according to the independent tax and spending watchdog, as the UK narrowly dodges another recession this year.
The Government will borrow £11 billion less over the next five years than forecast in November, the Office for Budget Responsibility (OBR) said, while economic growth estimates remain broadly unchanged.
The OBR expects the Government to borrow £126 billion this year, rather than £127 billion, while it maintained its 2012/13 forecast at £120 billion and lowered its each of its predictions for 2013/14 to 2016/17.
The lower borrowing bill came as the OBR lifted its estimate for gross domestic product (GDP) growth this year to 0.8%, from 0.7% in November, and cut its prediction in 2013 from 2.1% to 2%. The forecasts for 2014 to 2016 were unchanged.
Howard Archer, chief UK and European economist at IHS Global Insight, said the lower borrowing and unchanged growth forecasts were a "rare luxury" for the Chancellor, but warned 0.8% growth this year was "hardly a matter for celebration".
The Chancellor added that he is on target to eliminate the structural deficit - the share of the budget deficit that would remain after the economy recovers - by 2016/17.