Economic growth could be downgraded ‘every year for the rest of this Parliament’

The Office for Budget Responsibility (OBR) has warned on Monday that growth will be downgraded “every year for the rest of the Parliament.”

The OBR is to suggest that the economic growth will be “lower” for every year until 2029 under Labour and their policies, Sky News reported.

Sky News deputy political editor, Sam Coates told Politics as Sam and Anne’s podcast, “I understand that for every year for the rest of this Parliament, growth is going to be downgraded compared to what it thought it would be in March when the OBR last reported in its spring assessment.

“So compared to the forecast in March, you will get a lower growth figure.”

He believes that the government will say there is a “number of reasons and they will not take responsibility for their actions.

He said that the government will say growth for 2025 was higher and has “pulled forward some of the higher growth from next year, lowering that number.”

He added, “However you cut it, whatever the reasoning, once again, last year, growth will be lower after this budget than before, which is not a great position for government that had claimed growth as their top priority.”

Coates said that he thinks the Chancellor Rachel Reeves will announce more headroom on Wednesday’s Budget therefore the UK economy is no longer in the “doom loop.”

Coates concluded, “I think they want this to be a bit of a surprise and I think what this means in practice is that they’re going to create a bigger buffer, more headroom than people are expecting.

“If you remember in the autumn and in the spring statement, Rachel Reeves left just £9.9 bn between her spending projections and the amount that maximum amount she was allowed to borrow.

“I think that’s gonna go up in a way that sort of puts the question of whether she’s in the doom loop beyond… it sort of answers that.

“So, rather than it going to £15bn, I’d expect it to go higher. I don’t have an exact figure. I don’t know that it’ll be as much as £20bn.

“So that might well be one of the positive surprises when we actually get to Wednesday’s budget.”