Chancellor George Osborne has confirmed that the UK economy is growing at a faster pace than had previously been expected.
The Office for Budget Responsibility has estimated that the country’s GDP will expand by 1.4% in 2013, and by 2.4% next year.
Growth of 0.6% had originally been forecast for the year in March; the revision is the greatest since the beginning of the Treasury’s records in 1997.
The 2014 estimate has also risen from a March estimate of 1.8%.
‘There was no double dip recession,’ said Osborne. ‘Britain’s economic plan is working, but the job is not done. We need to secure the economy for the long term and the biggest risk to that comes from those who would abandon the plan.’ Osborne also promised to ‘spot the debt bubbles’ and deal with them.
Osborne claimed that he would bring down the country’s borrowing by £73 billion in the years ahead. The borrowing forecast is £111 billion for this year, £96 billion for next year, £79 billion for 2015-16, and £51 billion and £23 billion in the following two years.
According to the chancellor, the coalition inherited a deficit of 11% of GDP when it came to power in 2010.
The Office for Budget Responsibility has now lowered its predictions of underlying public sector net borrowing to 6.8% from 7.5% for 2013, and stated that it would fall further to 5.6% next year and 1.2% by 2018.
The Office for National Statistics also reassessed the depth of the recession, stating that the peak-to-trough collapse in the economy between 2008 and 2009 was 7.2%, not 6.3% as previously understood. Osborne told Parliament that this had wiped £112 billion off the economy, equivalent to £3,000 for every household.