The UK's economy is expected to grow slightly faster than expected this year and next, 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 forecast of 0.8%. .
The OBR also forecasts higher growth – of 2% – in 2025, up from 1.9% forecast in March.
But in 2026 and towards the end of the legislature, growth would be weaker than expected in March.
The Chancellor said the Budget would mark “the end of short-termism” and the OBR would now also provide a 10-year growth forecast when publishing its analysis of the Budget.
“Every budget I present will be focused on our mission to grow the economy,” Reeves said.
However, the OBR forecasts lower-than-expected growth for the end of the parliamentary term. 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.
