Osborne plays down UK economic growth hopes
- 18 January 2012
- From the section UK Politics
Chancellor George Osborne has warned that the UK economy faces "very difficult" times, ahead of the release of growth figures next week.
The Office for Budget Responsibility (OBR) has predicted they will show GDP fell in the last three months of 2011.
BBC economics editor Stephanie Flanders said the chancellor's comments would be seen as a "softening-up exercise".
But Mr Osborne said a recession - a second quarter of economic downturn - had not been forecast by the OBR.
The most recent figures - for July to September last year - showed growth of 0.5%.
But, in his Autumn Budget statement, Mr Osborne said the UK economy was now forecast to grow by only 0.9% for 2011 as a whole - downgraded from the 1.7% previously predicted.
And the figure for 2012 was 0.7% - down from an earlier estimate of 2.5%.
The chancellor, who is on a visit to Japan, said: "There are lessons from Japan, lessons that it takes a long time to recover from a big banking crisis, of a big property bubble, as a reminder of how much Britain got wrong in its policy over the last decade.
"But I think that we are moving more quickly than Japan did 20 years ago to confront our problems. When you look at the GDP numbers for Britain, they are very similar to the GDP numbers of France, Germany and other western countries."
He added: "I don't know what next week's GDP number is going to be. Our independent forecaster, the OBR, has warned us that it may well be a negative number. That was their forecast in November, but they didn't forecast a recession.
"So you don't have to tell me that the economic environment is very difficult for Britain and indeed for the whole world...
"We are next door to the eurozone so, of course, we are affected by what's going on."
BBC economics editor Stephanie Flanders said the comments would be seen as "part of a careful softening-up exercise, so we're less perturbed, if and when there's a negative sign in front of that preliminary GDP figure estimate when it comes out next Wednesday".
The Office for National Statistics will publish the figures.