Tomorrow’s papers will probably note the forecast that, by 2015, public sector employment will fall by 330,000, one hundred and sixty thousand less than the 490,000 forecast in June. 30,000 of the difference is down to “methodological refinements”. The remaining 130,000 reduction is because the Spending Review cut more from social security and less from Departmental budgets than OBR expected – a different balance of misery, rather than a genuine improvement.
Today’s Economic and fiscal outlook from the Office for Budget Responsibility updates the forecast for GDP growth in the June Budget forecast. The Chancellor told the House of Commons “the plan is working” but that isn’t really justified by the report, which revises OBR’s forecasts up for 2010 but down for the next couple of years:
|
GDP growth |
2009 |
2010 |
2011 |
2012 |
2013 |
2014 |
2015 |
| Today’s forecast | -5.0 | 1.8 | 2.1 | 2.6 | 2.9 | 2.8 | 2.7 |
| Change from June | -0.1 | 0.6 | -0.2 | -0.2 | 0.0 | 0.1 | 0.0 |
The explanation they give is that the growth we have seen in the second and third quarters of this year was “largely a timing effect”, with strong growth in construction and from firms replacing stocks more quickly than was originally expected – and both trends are likely to “unwind” soon.
These figures are very subdued for the upswing of the economic cycle and the OBR comments that the recovery will be:
“…at a slower pace than in the recoveries of the 1970s, 1980s and 1990s.”
They point out that it is “unprecedented” for growth not to rise above 3 per cent during this phase; this reflects:
“…the headwinds to growth from the outlook for credit conditions, efforts to reduce private sector indebtedness and the scale of the fiscal consolidation, which is yet to have its full effect on the economy.”
Tomorrow’s papers will probably note the forecast that, by 2015, public sector employment will fall by 330,000, 160,000 less than the 490,000 forecast in June. Thirty thousand of the difference is down to “methodological refinements”. The remaining 130,000 reduction is because the Spending Review cut more from social security and less from departmental budgets than OBR expected – a different balance of misery, rather than a genuine improvement.
The economic and financial outlook takes a peek beyond the 2015 horizon for most of their forecasts and adds that unless there are further welfare cuts, they expect public sector employment to fall a further 80,000 in 2015-16. Even so, today’s forecast does not reflect what managers in public sector organisations expect.
The Local Government Association expects 140,000 jobs to be lost next year and the Chartered Institute for Personnel and Development says that their members in the public sector expect very large scale redundancies – much larger than the OBR forecasts.
If today’s figures are right, by 2015 unemployment will still be above its pre-recession level – claimant count will be more than one million and ILO unemployment just under two million. At least a third of a million public sector workers will have lost their jobs – and people living on benefits will be particularly hard hit. The recovery will be weaker than the recoveries of the last three recessions.
If that’s what it’s like when the plan is working…
14 Responses to “OBR: Recovery “at a slower pace” than in the 70s, 80s and 90s”
Nigel Stanley
RT @leftfootfwd: OBR: Recovery “at a slower pace” than in the 70s, 80s and 90s: http://bit.ly/gSTnbm reports the TUC's Richard Excell
Cha Sea
https://www.leftfootforward.org/2010/11/office-for-budget-responsibility-recovery-at-slower-pace-than-70s-80s-90s/ #demo2010 #ukuncut #dayx
PCS GONW Branch
RT @leftfootfwd: OBR: Recovery “at a slower pace” than in the 70s, 80s and 90s: http://bit.ly/gSTnbm reports the TUC's Richard Excell
Stephen W
This is sophistry. Yes, things are bad. The reason for that would be that Labour fucked things up quite so badly over the last 13 years. If you’re really claiming that Labour have a magic wand that would make everything better then you’re plain delusional. This is just utterly partisan grandstanding at its very worst.
Spir.Sotiropoulou
RT @leftfootfwd: OBR: Recovery “at a slower pace” than in the 70s, 80s and 90s http://bit.ly/i59ffl