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By Tony Grew - 29th November 2010
The chancellor of the exchequer has told the Commons that Britain's economy is "on the mend".
George Osborne came to the House this afternoon to deliver his autumn forecast, the first since he established the independent Office for Budget Responsibility (OBR).
Today it published its forecasts.
"We should take a moment to recognise the significance of this occasion," Osborne said.
"Today is the first time that members of this House will engage in debate about an autumn forecast produced by the independent OBR, rather than conjured up by the chancellor of the exchequer," he told MPs.
Osborne said he has "full confidence in the independence of these numbers".
The OBR forecast growth next year of more than two per cent and "their central view is that there will be no double-dip recession".
CPI inflation is predicted to fall from 3.2 per cent in 2010 to 1.9 per cent in 2012, while business investment is set to grow by eight per cent for each of the next four years.
Employment is predicted to rise from 29 million to 30.1 million in the CSR period, with six per cent unemployment at the end of the parliament.
Osborne also said that the prediction in June that 490,000 public sector jobs will be lost has been revised down to 333,000 over the next four years.
The OBR also predicts the government will meet its fiscal mandate to eliminate the structural current budget deficit in 2014/15, one year early.
"Mr Speaker, when we came into office Britain was in the financial danger zone," Osborne told the House.
"We took decisive action."
He added: "Britain is on the mend".
Shadow chancellor Alan Johnson said he would move on from "bombast" to reality.
The OBR points out its central forecasts are almost certain to be wrong, he told the House.
Johnson said the government is attempting a timetable of fiscal consolidation barely tried anywhere else in the world, an "unprecedented gamble with people's livelihoods and the country's future".
He claimed Alastair Darling's "balanced approach" to deficit reduction is the reason why there was a recovery at the start of the year.
Next year's VAT rise and public sector cuts will slow growth, Johnson claimed.
Lower growth means fewer jobs, including in the private sector, and the OBR predicts a rise in unemployment next year.
"A jobless recovery will be no recovery at all," Johnson told the House.
He said the OBR predictions are based on a "huge increase in exports" and accused Osborne of taking a "huge gamble".
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