POLITICS

George Osborne Delivers Autumn Statement (Live Updates)

29/11/2011 12:01 | Updated 29 January 2012

The Office for Budget Responsibility has revised GDP growth down to 0.9% for this year and 0.7% next year, but does not expect Britain to slip back into recession.

George Osborne revealed the prediction, made by the independent economic forecaster, as he began delivering his Autumn Statement in the Commons on Tuesday afternoon.

The chancellor also confirmed to MPs that he will not able to get rid of the structural deficit by 2015 as he had originally pledged.

Osborne announced his plans for boosting the UK economy against a background of financial turmoil in the eurozone and gloomy forecasts for Britain.

On Monday the the Organisation for Economic Co-operation and Development (OECD) warned that the UK was at risk of a double-dip recession.

Check our liveblog below for all the developments, analysis and to find out who will pay for the boost to growth:

29/11/2011 16:34 GMT

Still Dan Hodges thinks today 'all but guaranteed the Conservative party victory at the next general election'

Read more here

29/11/2011 16:15 GMT

Did the punters like it? Nw Labour are favourites to win the next general election

Labour are 6/4 favourites to win the next General Election with William Hill who make the Conservatives 7/4, with another Hung Parliament quoted at 2/1.

‘The continuing economic problems seem to be boosting Labour’s chances of returning to power at the next General Election’ said Hill’s spokesman Graham Sharpe.

29/11/2011 16:01 GMT

Little good news in OBR forecasts. This is what they predict, according to PA

Household incomes will continue to be eroded in real terms for at least two more years, according to forecasts by the independent tax and spending watchdog.

The Office for Budget Responsibility (OBR) does not expect earnings growth to overtake the rate of inflation until 2013, and not by a significant margin until 2014.

The prediction will come as a blow to already hard-pressed consumers who have seen real household disposable incomes fall by 2.3% this year and will sound alarm bells among businesses that have borne the brunt of the spending squeeze.

The slow real-terms wage growth means consumer spending will be broadly flat throughout next year, the OBR said, applying further downward pressure to the UK's growth prospects.

29/11/2011 15:57 GMT

More bad news for jobs

@ faisalislam :

OBR: no net unemployment fall from Youth Contract. It will shift jobs from old to young

29/11/2011 15:51 GMT

The new economics foundation thinks banks are under-taxed

Lydia Prieg, Finance and Business Researcher, said: “The funds raised from British banks via the bank levy are likely to be entirely cancelled out by the government’s corporation tax cuts. It is also worth remembering that the financial services industry is exempt from VAT, which has introduced significant distortions into the UK economy, and has very likely inflated banks’ profits.

“The taxpayer is nowhere near recouping the cost of the extraordinary support extended to the banking industry throughout the crisis (for example, the billions forfeited to recapitalize Lloyds and RBS), and this ignores the substantial on-going cost of financing these initiatives (which the NAO estimate to be approximately £5bn per year). The revenue raised from the bank levy (£2.5bn) will be a drop in the ocean compared to these costs, particularly given the cuts in corporation tax”

29/11/2011 15:48 GMT

Mark Littlewood of the IEA says the government aren't cutting enough

“George Osborne is operating in difficult economic circumstances, but this is still a disappointing response. He has effectively ditched Plan A and embraced Plan A minus.

“He is not sticking to his deficit reduction policy. He is sticking to his spending policy. There’s a world of difference. The initial plan was to add £260bn to the national debt between now and the next election. That has now spiralled to £350bn.

“If growth and tax receipts are less impressive than initially thought, there needs to be a corresponding reduction in state spending. But the only major spending cut spelt out today – a reduction in the retirement age – doesn’t kick in until 2026.

“Additionally, upgrading many welfare benefits by a full 5.2% while wages remain flat will not help to incentivise people to enter the workforce.

“The Chancellor conceded that a possible recession in the eurozone could further worsen economic conditions here, but did not signal a readiness to introduce deeper cuts in spending should this occur. It will be difficult for him to retain his hard-earned credibility in the markets should he fail to indicate that further reductions in spending may be necessary.”

29/11/2011 15:30 GMT

This is fantastic - Citywire's dejargonifier

check it out here

29/11/2011 15:21 GMT

Reaction: Institute of Economic Affairs

Mark Littlewood, Director General of the Institute of Economic Affairs, said:

“George Osborne is operating in difficult economic circumstances, but this is still a disappointing response. He has effectively ditched Plan A and embraced Plan A minus.

“He is not sticking to his deficit reduction policy. He is sticking to his spending policy. There’s a world of difference. The initial plan was to add £260bn to the national debt between now and the next election. That has now spiralled to £350bn."

29/11/2011 15:12 GMT

The aid budget has been trimmed - but Andrew Mitchell thinks the government has 'reaffirmed its commitment' to the world's poorest

The Coalition Government has today reaffirmed its commitment to the world's poorest people by confirming the UK will spend 0.7% of Gross National Income (GNI) on international development from 2013. We will be the first country in the G20 to keep this promise.

Our spending plans meant the UK was on course to exceed this target, so our budget has been adjusted accordingly

29/11/2011 15:10 GMT

@ BBCStephanie :

OBR: GDP will be 3.5% smaller by 2016 then we thought. In today's money I reckon that's about £50bn of output lost, at the stroke of a pen.

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