Budget 2013: OBR halves UK growth forecast for 2013
The UK economy will post growth of 0.6% this year, according to the Office for Budget Responsibility (OBR), a downward revision from its December forecast.
Presenting the Budget 2013, Chancellor George Osborne said the OBR has halved its forecast from the 1.2% it previously expected.
The figure is much lower than consensus, which was for a 0.9% expansion.
The OBR also revised down its forecast for growth in 2014, after a poor year for the economy in 2012 when it just managed to post slight positive growth. The body expects to see 1.8% growth for 2014, down from 2% forecast in December.
This compares to a consensus forecast of 1.6% growth. Osborne also said the economy is likely to avoid a second quarter of negative growth.
The Chancellor appeared to rule out any major stimulus package, saying he "will not take that gamble" with the country's future.
Growth is forecast to reach 2.3% in 2015, 2.7% for 2016, and 2.8% for 2017, according to the OBR.
The eurozone will remain in recession throughout this year, the Chancellor said, adding continued weakness in the region is likely to impact the UK.
"Another bout of storms in the eurozone would hit Britain's economic fortunes hard. We are still very exposed to what happens on the continent."
He referred to the situation in Cyprus as "worrying" but confirmed the savings of UK Armed Forces members in the troubled nation would be protected.
Giving his speech for a Budget designed to "help those who want to work hard and get on", Osborne said the path to recovery is slower than the government had anticipated.
"It is taking longer than anyone had hoped but we must hold to the right track," the Chancellor said.
The budget deficit is now forecast to fall to 7.4% this year, higher than the 6.9% forecast in December's Autumn Statement.
The national debt is now predicted to reach a peak of 85.6% in 2016/17, two years later than earlier forecast.
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