Darling's slashed growth predictions 'still too high'

Chancellor Alistair Darling today signalled that the impact of global financial turmoil would last longer than expected as he cut growth forecasts for the second time in six months.







Mr Darling slashed growth forecasts to between 1.75 per cent and 2.25 per cent for 2008 - following a similar move in October's Pre-Budget statement - but also cut his predictions for next year for the first time.



The Chancellor now expects the economy to grow by between 2.25 per cent and 2.75 per cent in 2009 - compared with the 2.5 per cent to 3 per cent anticipated six months ago - as the effects of the credit crunch that began in the US last year linger on.



But Howard Archer, Global Insight chief UK economist, said the predictions "still looked too high".



Mr Archer said: "Mr Darling highlighted weaker global growth, financial market turmoil and tighter lending conditions influenced markedly by the US crisis. He also argued that UK growth is likely to be higher than the Eurozone, US and Japan in 2008.



"This skates over the fact that the UK economy has serious problems of its own - notably including high household debt levels and an over-extended housing market."



The Chancellor expects growth to return to trend levels of between 2.5 per cent and 3 per cent in 2010 and said that the economy was "more resilient and more prepared to deal with future shocks".



His revised 2008 forecasts bring him more in line with Bank of England and City predictions.

Start your day with The Independent, sign up for daily news emails
Have you tried new the Independent Digital Edition apps?
ebooks
ebooksA special investigation by Andy McSmith
2015 General Election
May2015

Poll of Polls

Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Recruitment Genius: Administrator

£18000 - £20000 per annum: Recruitment Genius: This company has a track record...

Recruitment Genius: Solar Field Sales Executive

£40000 - £70000 per annum: Recruitment Genius: This is an opportunity to join ...

Recruitment Genius: Customer Relations Officer

£13000 per annum: Recruitment Genius: This is an exciting opportunity to join ...

Recruitment Genius: IT Help Desk Support

£14500 - £15000 per annum: Recruitment Genius: An IT Help Desk Support individ...

Day In a Page

Homeless Veterans campaign: Donations hit record-breaking £1m target after £300,000 gift from Lloyds Bank

Homeless Veterans campaign

Donations hit record-breaking £1m target after huge gift from Lloyds Bank
Flight MH370 a year on: Lost without a trace – but the search goes on

Lost without a trace

But, a year on, the search continues for Flight MH370
Germany's spymasters left red-faced after thieves break into brand new secret service HQ and steal taps

Germany's spy HQ springs a leak

Thieves break into new €1.5bn complex... to steal taps
International Women's Day 2015: Celebrating the whirlwind wit of Simone de Beauvoir

Whirlwind wit of Simone de Beauvoir

Simone de Beauvoir's seminal feminist polemic, 'The Second Sex', has been published in short-form for International Women's Day
Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Mark Zuckerberg’s hiring policy might suit him – but it wouldn’t work for me

Why would I want to employ someone I’d be happy to have as my boss, asks Simon Kelner
Confessions of a planespotter: With three Britons under arrest in the UAE, the perils have never been more apparent

Confessions of a planespotter

With three Britons under arrest in the UAE, the perils have never been more apparent. Sam Masters explains the appeal
Russia's gulag museum 'makes no mention' of Stalin's atrocities

Russia's gulag museum

Ministry of Culture-run site 'makes no mention' of Stalin's atrocities
The big fresh food con: Alarming truth behind the chocolate muffin that won't decay

The big fresh food con

Joanna Blythman reveals the alarming truth behind the chocolate muffin that won't decay
Virginia Ironside was my landlady: What is it like to live with an agony aunt on call 24/7?

Virginia Ironside was my landlady

Tim Willis reveals what it's like to live with an agony aunt on call 24/7
Paris Fashion Week 2015: The wit and wisdom of Manish Arora's exercise in high camp

Paris Fashion Week 2015

The wit and wisdom of Manish Arora's exercise in high camp
8 best workout DVDs

8 best workout DVDs

If your 'New Year new you' regime hasn’t lasted beyond February, why not try working out from home?
Paul Scholes column: I don't believe Jonny Evans was spitting at Papiss Cissé. It was a reflex. But what the Newcastle striker did next was horrible

Paul Scholes column

I don't believe Evans was spitting at Cissé. It was a reflex. But what the Newcastle striker did next was horrible
Miguel Layun interview: From the Azteca to Vicarage Road with a million followers

From the Azteca to Vicarage Road with a million followers

Miguel Layun is a star in Mexico where he was criticised for leaving to join Watford. But he says he sees the bigger picture
Frank Warren column: Amir Khan ready to meet winner of Floyd Mayweather v Manny Pacquiao

Khan ready to meet winner of Mayweather v Pacquiao

The Bolton fighter is unlikely to take on Kell Brook with two superstar opponents on the horizon, says Frank Warren
War with Isis: Iraq's government fights to win back Tikrit from militants - but then what?

Baghdad fights to win back Tikrit from Isis – but then what?

Patrick Cockburn reports from Kirkuk on a conflict which sectarianism has made intractable