Irish growth to outpace Britain
Published 24/03/2011 | 05:00
BRITAIN now expects her economy to grow more slowly than official Irish forecasts over the next two years, according to the latest official forecasts from both countries.
British Chancellor George Osborne yesterday forecast annual growth of 1.7pc this year and 2.5pc next year.
The Department of Finance expects the Irish economy to grow 1.7pc this year and 3.2pc next year.
The chancellor added that he would stick to his controversial deficit-reduction plan despite announcing revised and more pessimistic forecasts in his budget speech in the House of Commons in London yesterday.
"Britain has a plan and we're sticking to it," Mr Osborne told MPs. "Today's budget is about reforming the nation's economy, so that we have enduring growth and jobs in the future."
Government borrowing to fund the deficit this fiscal year will be "below target" at £146bn (€168bn), Mr Osborne said.
The government will then borrow £122bn in 2011-12, or £5bn more than originally forecast. Borrowing will fall to £101bn in 2012-13 compared with the previous £91bn forecast, and to £70bn in 2013-14, previously set at £60bn.
The agency, created by Mr Osborne last year to keep economic forecasts at arm's length from government, also sharply raised its inflation forecast to between 4pc and 5pc this year, from 3pc previously.
There were also a few measures aimed at helping families that have been hammered by accelerating inflation, rising unemployment and the threat of higher interest rates but Mr Osborne offered few prospects for anything likely to close the opposition Labour Party's lead of as much as 11 percentage points over Prime Minister David Cameron's Conservatives.
For ordinary Britons, Mr Osborne announced a 1p cut in fuel duty that was to take effect at petrol stations around the country last night. That reversed a plan by Labour to raise the duty by 1pc from next month.
"I know that by itself this will not end the pressure on family budgets," said Mr Osborne. "But we've done what we can."
Implementation of an austerity programme, with plans to slash more than 300,000 public-sector jobs over the next four years, begins fully next month.