The OBR has got its growth projection wrong again. Last month they predicted growth this quarter of 0.3 per cent. Today's figures show they are out by 0.5 percentage points.
Today’s terrible growth figures further undermine the predicting powers of the Office for Budget Responsibility.
Just a month ago, the OBR published their latest Economic and fiscal outlook which predicted growth in Q1 of 2012 of 0.3 per cent. Today’s figures of -0.2 per cent mean that they were out by 0.5 percentage points.
Table 3.3 below (p.50, pdf) shows their prediction:
The OBR was forced to revise down its figures for 2011 on five occasions. They initially predicted 2.6 per cent before the Emergency Budget in June 2010 but this was downgraded to 2.3 per cent after that Budget, 2.1 per cent in November 2010, 1.7 per cent in March 2011, 0.9 per cent in November 2011, and finally 0.8 per cent in March 2012.
• Osborne’s expansionary fiscal contraction has failed 24 Apr 2012
The OBR’s latest growth prediction for 2012 is 0.8 per cent but that was predicated on positive growth this quarter. Unless economic output picks up in the remainder of the year, it looks like they’ll have to revise their forecast yet again.