Budget watchdog warns of double dip recession as he steps down

12 April 2012

The country's outgoing economics watchdog today admitted he was "not confident" that the country can avoid a double-dip recession.

Sir Alan Budd said that he still believed that continued growth was more likely but his caution will fuel fears of a bumpy recovery.

"I'm not confident of it," he told BBC radio, when asked if Britain would avoid a further downturn. "Our fan charts show that it is a possibility — just as much stronger growth is a possibility.

"It's not the most likely outcome. The most likely outcome is that the economy will continue to grow, but you cannot rule it out."

His comments come days after Bank of England governor Mervyn King warned of "a choppy recovery" as the country cut public spending and tried to boost the private sector. The Bank also downgraded its growth forecast for next year and said inflation would be higher.

At the same time, consumer confidence has fallen sharply since George Osborne's Budget, which outlined spending cuts of up to 25 per cent in most departments, and figures show house prices beginning to fall.

Sir Alan stood down on Friday as the first head of the Office of Budget Responsibility, a body set up by Mr Osborne to increase trust in official forecasts on growth and borrowing.

The OBR, which is supposed to be independent, was accused of bowing to ministers in July when it rushed out figures contradicting predictions that the coalition's first financial package would cost 1.3 million jobs.

Sir Alan said he regretted bringing out figures a day early, giving David Cameron a chance to attack Labour.

"I enormously regret the effect it had on our reputation," he said. "One inevitably makes mistakes. But that was in some sense the most harmful event in terms of press coverage."

Create a FREE account to continue reading

eros

Registration is a free and easy way to support our journalism.

Join our community where you can: comment on stories; sign up to newsletters; enter competitions and access content on our app.

Your email address

Must be at least 6 characters, include an upper and lower case character and a number

You must be at least 18 years old to create an account

* Required fields

Already have an account? SIGN IN

By clicking Sign up you confirm that your data has been entered correctly and you have read and agree to our Terms of use , Cookie policy and Privacy notice .

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply.

Thank you for registering

Please refresh the page or navigate to another page on the site to be automatically logged in