The chancellor said the Budget would mark “an end to short-termism” and that the OBR would from now on also provide a 10-year growth forecast when it publishes its analysis of the Budget.
“Every Budget I deliver will be focused on our mission to grow the economy,” Reeves said.
However, the OBR is forecasting lower than expected growth for the end of the parliament. Growth in 2027 and 2028 would be 1.5%, down from the 1.8% and 1.7% forecast in March.
The OBR expects inflation to remain slightly above the Bank of England’s 2% target until 2029.
It is hard it to make precise predictions several years ahead, and economic forecasts are regularly updated.
The combination of stronger growth early in the parliament, followed by weaker growth in later years, suggests the cumulative impact, or the size of the economy by the end of the parliament, will not be very different overall.
In total the economy is set to grow by nearly 8.2% in total by 2028. In March it was forecast to grow by nearly 8.5%.
However, Paul Johnson, head of the independent economics think tank the Institute for Fiscal Studies, described the growth forecast as “pretty disappointing stuff”.
Measures in the Budget would increase demand this year and next year, which was likely to keep inflation and interest rates higher, resulting in slower growth in later years, he told the BBC.
https://www.bbc.com/news/articles/c5yge6knpzdo,
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