Budget 2015: Oil price slump prompts UK growth upgrades

Lower inflation, driven by a fall in oil prices, has helped the Office for Budget Responsibility (OBR) upgrade UK growth forecasts for 2015 and 2016 and given the government room to move on near-term borrowing.

UK CPI inflation hit a record low of 0.3% in January, driven by an oil price which has more than halved since last summer. The OBR today revised down its forecast for inflation this year to just 0.2%, and also scaled back forecasts for the next four years, though Osborne confirmed the Bank of England's inflation target remains at 2%. Lower inflation is thought to be behind today's decision by the OBR to revise up its 2015 growth forecast from 2.4% in December's Autumn Statement to 2.5% - but below the 2.6% figure some had predicted. Growth is forecast to come in at 2.3% for the sub...