Kate Andrews Kate Andrews

When will Rishi Sunak see sense on the Triple Lock?

(Credit: Getty images)

When Jeremy Hunt announced his ‘Autumn Statement for Growth’ last week, there was a slight problem: the Office for Budget Responsibility (OBR) had actually revised down its growth forecasts. Apart from this year and the last year for the forecast, GDP gains are expected to be smaller than were predicted back in March. Yes, the government can still technically say it is making good on its pledge to ‘grow the economy’ — but best of luck to any minister who stands up and sincerely insists that 0.6 per cent or 0.7 per cent growth is something to boast about.

The OBR is not, of course, the only forecaster. There are plenty of independent bodies that try to put estimates on GDP, including the OECD, which released its latest Economic Outlook report this morning. Unfortunately for the Chancellor, these forecasts reflect the rather gloomy outlook of the OBR. Its forecast is slightly lower for this year than the OBR’s, predicting 0.5 per cent growth compared to 0.6 per cent growth. Then it predicts 0.7 per cent growth next year and 1.2 per cent in 2025 — all in the same ball park as the OBR. Put simply, the OECD expects the UK economy is in for more painful years ahead.

These forecasts assume the Bank of England holds interest rates at 5.25 per cent for all of next year; a crunch that is still working its way through the economy and is expected to be felt by more consumers (and mortgage holders) next year. The Bank’s governor Andrew Bailey has repeatedly suggested that a rate cut cannot be expected anytime soon — though he and the his Monetary Policy Committee will be laser-focused on just how much these rates are impacting economic growth, desperate to keep the UK economy on the right side of a recession.

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