Britain is sticking to its austerity program despite new official forecasts showing the economy will shrink this year and government borrowing will remain higher for longer as the euro-zone crisis depresses demand for exports.
The Office for Budget Responsibility (OBR), which monitors the government’s performance in meeting fiscal targets, said the world’s 6th biggest economy would contract by 0.1%, compared with a previous forecast for growth of 0.8%
Growth should recover to 1.3% in 2013, the OBR said. That would represent a faster rate of expansion than expected in either Germany or France, based on forecasts from the International Monetary Fund, but compares with a previous prediction of 2%.
“Britain is on the right track and turning back now would be a disaster,” finance minister George Osborne said in a semi-annual budget speech to parliament. “It’s a hard road, but we’re getting there.”
And then there is this … Osborne Says U.K. Growth Forecast Cut as Deficit Seen Wider
Hoping for a growth of 1.3%? I bet that won’t cover birth rates … To the illiterate Obama voters, this is really bad.