(Alliance News) - Downing Street has sought to paint a positive picture of the UK's economic outlook amid reports the government's own watchdog has downgraded its growth forecast.
The Office for Budget Responsibility, OBR, is said to have cut its projections for economic growth in a forecast handed to Chancellor Rachel Reeves last week, Bloomberg has reported.
Reeves is due to provide an update on the outlook for the economy on March 26, and a reduced growth forecast from the OBR could mean she needs to cut spending in order to meet the rules on debt and borrowing she set for herself in October.
But on Wednesday, the prime minister's official spokesman pointed to other organisations that had upgraded their forecasts for the UK economy.
Saying he would not "get ahead of the OBR forecast", the spokesman said: "In recent weeks and months the OECD and the IMF have upgraded our growth forecast over the next three years.
He added: "The government remains relentlessly focused on growth as the only way of sustainably raising living standards and delivering the investment that we need in our public services."
In December last year, the OECD increased its forecast for UK growth in 2025 from 1.2% to 1.7%, while in January the IMF slightly upgraded its prediction to 1.6% growth.
But last week, the Bank of England halved its growth expectations for this year, suggesting the economy would only expand by 0.75% before accelerating to 1.5% in 2026 and 2027.
The OBR forecasts will have a more direct impact on the chancellor's decisions as they are used to determine whether she is on course to meet her fiscal rules.
Conservative shadow chancellor Mel Stride said reports of a downgraded OBR forecast showed the government "needs to stop playing politics and come up with some serious solutions to the significant economic problems they've created".
He said: "With the Bank of England predicting growth falling and inflation rising, it is clear that this chancellor needs to make urgent course corrections, before the damage she is doing to the economy becomes permanent."
Reports of a downgraded OBR forecast come ahead of the publication of the latest GDP growth figures on Thursday, which cover the period up to the end of 2024 and will provide an indication of whether the economy expanded or contracted during Labour's first six months in power.
The previous release showed 0% growth in the third quarter of 2024, and growth of less than 0.1% in December would mean the economy shrank slightly in the last three months of the year.
By Christopher McKeon, PA Political Correspondent
Press Association: Finance
source: PA
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