Presenting his first Autumn Statement as Chancellor of the Exchequer, Chancellor George Osborne has asserted that Britain is ‘on track’ to recover from the deepest recession of post-war times.
The Statement was largely a response to the first Autumn forecast from the independent Office for Budget Responsibility (OBR), created by the Coalition Government earlier this year. Despite issuing a cautionary note on the reliability of forecasts, Mr Osborne went on to argue that the OBR report vindicated the Government’s ‘decisive action’ on the economy.
As widely predicted by economists, the economic growth forecast for 2010 was increased, from 1.2% to 1.8%. However, the estimates for 2011 and 2012 were reduced from 2.3% to 2.1%, and from 2.8% to 2.6% respectively, with the forthcoming increase in VAT – coupled with over £80 billion of spending cuts – expected to slow the pace and result in a period of ‘sluggish growth’. Meanwhile public borrowing forecasts for the current financial year have been revised downwards by £1 billion, and borrowing is expected to fall from £148.5 billion to £18 billion in 2015/16.
Mr Osborne was keen to emphasise the OBR’s view that Britain will not experience a double-dip recession, and that there will instead be a ‘gradual rebalancing’ of the economy, with the Government set to reach its target of eliminating the current structural deficit a year early.
So is that it then? Are we out the other side? Clients are recruiting, candidates are looking for new jobs, and the number of people in jobs looking for jobs has increased as well. Like an early spring after a harsh winter, there are green shoots, but it won’t take much of a harsh frost to see them wither.