Budget 2010: Economist reaction

Economists are broadly positive on today's emergency Budget and are scrambling to revise their own growth forecasts in light of the austerity measures.

George Osborne forecast slower UK GDP growth in the next five years - 1.2% this year and 2.3% 2011, followed by 2.8% in 2012, 2.9% in 2013 and 2.7% in 2014 and 2015. The 2.6% forecast for 2011 is down from the 3%-3.5% estimate made in the last Labour Budget three months ago. Keith Wade, chief economist at Schroders, has reduced his growth forecasts due to the VAT rise. He initially anticipated 2.4% growth in the UK by the end of the year, but has reduced this to 2.2% because the rise was higher than he expected. Wade says the hike from 17.5% to 20% was tough, as he had anticipat...