The UK’s economy is expected to grow slightly faster than expected this year and next year, according to the government’s official forecaster.
Presenting the Budget, Chancellor Rachel Reeves said the Office for Budget Responsibility (OBR) predicted the economy would grow by 1.1% this year, up from its previous prediction of 0.8%.
The OBR also forecast higher growth – of 2% – in 2025, up from its March forecast of 1.9%.
But in 2026 and towards the end of the parliament, growth would be weaker than was forecast in March.
The chancellor said the Budget would mark “an end to short-termism” and that the OBR would from now on also provide a 10-year growth forecast when it publishes its analysis of the Budget.
“Every Budget I deliver will be focused on our mission to grow the economy,” Reeves said.
However, the OBR is forecasting lower than expected growth for the end of the parliament. Growth in 2027 and 2028 would be 1.5%, down from the 1.8% and 1.7% forecast in March.
The OBR expects inflation to remain slightly above the Bank of England’s 2% target until 2029.