Boost for Brown as 1% GDP growth is predicted - Economy - News - Moneyfacts


Boost for Brown as 1% GDP growth is predicted

Boost for Brown as 1% GDP growth is predicted

Category: Economy

Updated: 30/04/2010
First Published: 30/04/2010

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.
Gordon Brown has been given a boost this morning after a think tank predicted that the economy would grow by 1% this year and more in 2011 and 2012.

It is likely to come as welcome relief for the Prime Minister who has suffered a difficult couple of days in which has been forced to apologise for his remarks about a lifelong Labour voter and came last in some of the polls rating the performance of the three main parties' leaders in yesterday's television debates.

However, the National Institute of Economic and Social Research's (NIESR) could provide the Labour Party leader some relief

The recent first estimates for GDP growth in the UK over the first three months of the year were disappointing, with an expansion of just 0.2% reported. Many analysts and experts had thought a growth figure of 0.4% would be reported.

The final figure could yet be revised upwards or downwards, as more relevant data continues to filter through.

Looking forward, the NIESR has also said that after a slow recovery this year, economic output will increase by 2% and 2.2% in 2011 and 2012 respectively.

The organisation went on to predict that unemployment will peak at 2.7 million in 2011 and that consumer price inflation will average 3.1% this year, falling back to just below the government's 2% target in the following two years.

"Additional tax increases and spending cuts worth 1% of GDP each are needed to put the public finances on a better long term footing," the think tank added.

The public will go to the polls next Thursday in what is likely to be the most closely fought general election in years.

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