Chancellor cuts growth forecast

October 9, 2007

Chancellor Alistair Darling has cut his growth forecast for next year but offered hopes that the impact of the global credit crunch might be short-lived.

Mr Darling lowered GDP growth predictions for 2008 to between 2% and 2.5% – compared to the 2.5% to 3% predicted by former chancellor Gordon Brown during his last Budget in March.

But the Chancellor added that the economy remains on track for 3% growth this year and he maintained forecasts of between 2.5% and 3% for both 2009 and 2010.

His widely-expected move to cut 2008 growth predictions follows the summer’s financial turmoil when banks, fearful of exposure to losses on high-risk US mortgages, stopped lending to each other, leading to the run on mortgage lender Northern Rock.

Channel 4 – News – Chancellor cuts growth forecast