Budget 2011: Osborne cuts UK growth forecast

The UK economy will grow by 1.7% this year, significantly below previous estimates, George Osborne announced today.

The lower-than-expected growth figures are due to weak Q4 figures last year, a rise in world commodity prices and higher-than-expected inflation.

The independent OBR had earlier forecast 2.1% growth this year and 2.6% in 2012.

Opening his Budget speech, Osborne said the OBR now expects growth of 2.5% in 2012, 2.9% in 2013, 2.9% in 2014 and 2.8% 2015.

He added the current inflation target of 2% will remain the same. Bank of England governor today warned UK inflation could hit 5%.

Osborne said today's Budget would not be not a tax-raising Budget, but nor would it be a "give-away".