OBR: UK will fail to meet 2011 growth targets

Office for Budget Responsibility claims that the economy faces risks in both directions for Q3

The UK is set to miss its growth target this year, according to the Office for Budget Responsibility.

Reuters reported today that in an interview with the Independent newspaper, OBR chairman Robert Chote said that growth had been weaker than expected in the first six months of the year, with ‘risks in both directions’ for the third quarter.

The OBR was set up last year by the coalition government to generate its growth and fiscal forecasts.

Speaking to the Independent, Chote said: “As a simple matter of arithmetic, in order to get to 1.7 per cent now you'd be looking for quarter-on-quarter growth rates of one per cent in the second and third quarters of 2011, and there aren't many people out there expecting that.

"Looking forward to the next quarter, in the March forecast we had 0.5 per cent for the third quarter. Now there are various indicators saying the third quarter will be relatively weak, but on the other hand there were special factors in the second quarter so there may be bounce-back there. There are potential pressures in both directions.”

Last week the doom-mongers were proved right when the Office of National Statistics revealed the economy grew just 0.2 per cent for the second quarter of 2011.

And in figures released last month, the OBR said that public sector net borrowing hit £14bn in June, £300m higher than in June 2010 and £1.5bn above market expectations.

Worryingly it revealed that central government spending was £2.3bn up on last year, while receipts were £2.1bn higher.