Budget forecasts look shaky as gloom grows

Economists attack assumptions underlying Darling's Budget, claiming expectations of a rebound in 2009 look optimistic in light of current market data

Alistair Darling's maiden budget might prove too optimistic in a climate of increasingly alarming growth and inflation data according to asset management economists. The Budget downgraded the Treasury's Gross Domestic Product (GDP) forecast for this year to between 1.75% and 2.25%, although the Government expects growth in 2009 to pick up to between 2.25% to 2.75%. It applied hikes on car tax and the price of cigarettes and alcohol to increase income in light of the market downturn, which has led to fewer and smaller transactions and therefore a diminished tax income. Royal London Ass...