New watchdog downgrades forecast for UK growth
A new watchdog has predicted economic growth will not be as substantial as that forecast by the previous Labour government.
The Office for Budget Responsibility (OBR) claims the econony will grow by 2.6% in 2011 - previously, Labour had said it would expand by 3% to 3.5%.
However, the OBR says the deficit and debt will not be as bad as forecast, and thinks the public deficit will fall to 10.5% of the UK's GDP - Labour had put a figure of 11.1% on public deficit.
Sir Alan Budd, chairman of the OBR, said he felt the recession had not caused ''permanent damage'' to the British economy, and said the changes to the forecasts were ''all within the normal range of uncertainty''.
Deputy Prime Minister Nick Clegg was expected to say later today the Government needed to implement spending cuts to slash public debt.
But former Chancellor Alistair Darling warned if public spending is cut too much it could plummet the UK into a double-dip recession.
Chancellor George Osborne is to hold an emergency Budget next Tuesday.