Watchdog slashes forecast as Chancellor defends plan

CHANCELLOR Rachel Reeves said she had the “right economic plan” for the UK despite the budget watchdog slashing its forecast for growth this year.

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The Office for Budget Responsibility indicated gross domestic product will increase by 1.1% in 2026, down from the 1.4% it forecast in November.

But the watchdog upgraded its forecasts for 2027 and 2028 from 1.5% to 1.6%.

Updating MPs on the forecasts in her spring statement, Ms Reeves said: “This Government has the right economic plan for our country, a plan that is even more important in a world that in the last few days has become yet more uncertain.”

She added: “The new forecasts from the Office for Budget Responsibility confirm that our plan is the right one - inflation is down, borrowing is down, living standards are up and the economy is growing.”