U.K. 2013 Growth Forecast Raised to 1.4%, Osborne Says
U.K. Chancellor of the Exchequer George Osborne said the British economy will expand 1.4 percent in 2013, up from the 0.6 predicted in March, the first growth-forecast upgrade since 2010.
The Office for Budget Responsibility raised its growth estimate as Osborne used his Autumn statement to the House of Commons to tell lawmakers his strategy for trimming the budget deficit while driving growth is working.
'We have held our nerve while those who predicted there would be no growth until we turned the spending taps back on have been proved comprehensively wrong,' Osborne said. 'Thanks to the sacrifice and endeavor of the British people, I can today report the hard evidence that shows our economic plan is working.'
The OBR, which oversees forecasting for the Treasury, also raised its 2014 growth prediction to 2.4 percent from 1.8 percent.
The Bank of England's Monetary Policy Committee, led by Governor Mark Carney, will announce its benchmark interest rate at noon in London, with a Bloomberg survey of 48 economists expecting it will be kept at 0.5 percent. The central bank has pledged to leave its key rate at a record low until unemployment, now at 7.6 percent, falls to 7 percent.
The growth forecast marks a boost for Osborne and Prime Minister David Cameron 's Conservative Party as campaigning starts for the 2015 election. At the time of the March budget, Britain had just lost its top credit score with Moody's Investors Service, the economy was emerging from a contraction and Osborne was under pressure to relax his austerity program, which has reduced the deficit to about 7 percent of gross domestic product from a post-World War II high of 11 percent.
To contact the reporter on this story: Thomas Penny in London at tpenny@bloomberg.net
To contact the editor responsible for this story: James Hertling at jhertling@bloomberg.net
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