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Economic growth forecast is halved in blow to Reeves
The Independent
|March 22, 2025
The official economic growth forecast for this year will be cut in half next week in what will be a serious setback for Sir Keir Starmer and Rachel Reeves.
As the chancellor prepares to unveil a swathe of spending cuts at next week’s spring statement, the government’s spending watchdog is set to lower the expected growth rate for 2025 from 2 per cent to about 1 per cent.
The Office for Budget Responsibility’s (OBR) downgrade is a major blow for the government, with Sir Keir having repeatedly said economic growth is his top priority.
Ms Reeves will use her speech on Wednesday to attempt to blame the steep drop on the worsening global economic outlook as Donald Trump imposes trade tariffs on some goods imported to the US, The Telegraph reported.
But the downgrade could force Ms Reeves to turn to fresh tax hikes or steeper than expected spending cuts to meet her selfimposed borrowing rules.
And it came as official figures showed government borrowing soared above forecasts last month due to sharp increases in public spending.
This story is from the March 22, 2025 edition of The Independent.
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