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December 4, 2012 5:44 pm
The Office for Budget Responsibility will reduce the 2012 forecast from 0.8 per cent growth to about zero and 2013 from 2 per cent to about 1 per cent. Medium term outlook will also be weaker but the OBR hopes the scope for recovery will persist, even if it is delayed.
Borrowing and debt will overshoot Treasury targets even though the figures will be flattered by central government snatching back a surplus built up under quantitative easing. Public sector borrowing will rise this year and only get back on a downward slope next financial year once the recovery gets going again.
The target to reduce public debt as a share of national income by 2015-16 looks dicey and the government will probably need an extra year to be sure of meeting its target to eliminate the current structural deficit in five years. George Osborne is likely to keep debt rule in place, even though he is on track to miss it.
Likely to include richer people who want to contribute to pensions and live in smart houses, the workless poor who will see benefits squeezed, public sector workers and departmental spending on administration.
Motorists, who are likely to gain from frozen fuel duty; schools with slightly higher capital spending; housing and jobs programmes
The chancellor wants to approve gas-fired power stations and champion shale gas extraction as well as relaunching the private finance initiative. Mr Osborne will announce new government guarantees for major infrastructure projects. He will probably push business support spending to the regions and enhance investment and export incentives for smaller companies.
Following outrage over the small corporate tax bills paid by some multinationals, Mr Osborne will launch another set of tax avoidance measures designed to shore up the corporate and personal tax systems.
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