Budget speech latest: growth forecast downgraded

That’s quite a squeeze on the growth forecast, down nearly half a per cent to 1.7% for this year. And as Chris Giles argues  in the FT (punch through to Budget checklist p3), the subsequent growth predictions that the OBR provide and which allow the government to meet its targets by the end of the parliament are based on “absurdly rigid” assumptions of sustainable growth which make it “very difficult for it to forecast anything other than success for George Osborne’s deficit reduction programme.”

So although George Osborne is rightly pointing out that many other countries are having to revise their plans, coming back for more money and he is still sticking to his original deficit reduction plan with a fiscally neutral budget, that may not be a position that holds for the whole parliament. He may yet need the “wriggle room” he left himself when he said he’d meet his targets a year early.