Budget 2011: Managers react to OBR growth downgrade

Fund managers believe the revised growth forecast for the UK this year, as revealed in George Osborne's Budget, is still too optimistic and may not be an achievable target.

A downgrade was widely expected, so markets did not react strongly when the Office for Budget Responsibility slashed its forecast from 2.1% to 1.7% for 2011. Cazenove’s CIO Richard Jeffrey says the revision is below what the City expected, although the UK's growth could actually be weaker. However, he says the gilt markets showed "modest relief" after Osborne revealed plans to reduce the deficit on are still on target. "Yields are down, so they are showing some relief the treasury's borrowing targets are still on track, to reduce the borrowing level, and debt is falling. It is a modes...