Budget 2014 Economy

Budget 2014 Economy

Economic forecast

The Office for Budget Responsibility has revised up its growth forecast for UK GDP growth from 2.4% to 2.7% in 2014 and from 2.2% to 2.3% in 2015, and 2.6% in 2016, 2.6% in 2017 and 2.5% in 2018.

Economy is recovering faster than forecast and the Chancellor said that the Government had “held our nerve” when criticised for the economy recovering slower than forecast.

The Chancellor suggested that 6 years ago we were in the deepest recession in modern times.  This year our economy will be larger now that was 6 years ago.

He claimed that the UK is growing faster than Germany, Japan and even USA.  He claimed ther no major World economy growing faster.

More Jobs

Mr Osborne also suggested that Labour predicted 1m job losses but actually 1.3m more people are in work and fall by 24% less claiming unemployment benefits and that under the current government their were are now 1.5m more jobs than 5 years ago.  He claimed that UK employment rates are higher in the UK than the USA for the first time in 35 years.

Other forecasts

• Earnings to grow faster than inflation – so we can afford increase the minimum wage to £6.50 per hour next year.
• Public sector net debt is forecast to peak at 78.7% of GDP in 2015-16 = 1.2% lower than forecast at Autumn Statement 2013 – before falling each year and reaching 73.8% of GDP in 2018-19.

Debt

Mr Osborne suggested that under the previous government, UK borrowing was £1 in every £4 spent.

Under the current government the International Monetary Fund says the UK has the largest reduction of econiomic defecits (i.e.  spending more than we earn):

• 11% under Labour
• Now 6% in 2014
• Next year 4.5% in 2015
• 4.2 in 2016
• 2.4% in 2017 and and to keeps falling
• By 2018/19 the OBR forecast no defecit i.e.  we are earning more than we borrow.
• We were borrowing £150bn pa now borrowing £108bn

The Office for Budget Responsibility OBR has revised down the UK's borrowing to:

• £95bn for 2014/15
• £75bn for 2015/16
• £44bn for 2016/17
• £17bn for 2017/18
• By 2018/19, a surplus of £5bn

Watch/Listen Budget Videos - 15 Videos Explaining the Key Points of Budget 2014

Budget 2014 Articles -

Growth

National Savings