Britain slashes growth forecast to 2.6 % in 2011

Britain yesterday slashed its 2011 economic growth forecast to 2.6 per cent and cut its public borrowing estimate to £155 billion, according to official data on behalf of the new government.

The growth figure, published by an independent fiscal watchdog set up by British Prime Minister David Cameron's coalition administration, compared with the 3.25 per cent expansion which had been forecast by the previous government.

The Office for Budget Responsibility added in a statement that British gross domestic product was expected to grow by 1.3 per cent in 2010, which marked a slight upward revision.

The state borrowing forecast compared with the previous estimate of £163 pounds for the current 2010/2011 financial year which covers the 12 months to April 2011.

The new forecasts were published ahead of an emergency budget on June 22 due from British finance minister George Osborne.

Mr Osborne's emergency budget is expected to unveil deep spending cuts and large taxation rises, as the coalition seeks to slash a public deficit which hit a record 156 billion pounds in the 2009/2010 fiscal year.

The OBR also forecast that GDP will expand by 2.8 per cent in 2012, followed by growth of 2.8 per cent and 2.6 per cent in 2013 and 2014 respectively.

The new forecasts do not include the impact of measures recently introduced by Mr Cameron's Conservative-Liberal Democrat government, which last month ousted the previous Labour administration that was led by Gordon Brown.