Forecasts are gloomier

ECONOMIC forecasters have become gloomier about the economy since last month, according to the Treasury's monthly survey of independent forecasts, writes Diane Coyle.

The average projection for GDP growth is 3.2 per cent - a shade down from 3.3 per cent in January. Inflation forecasts average 3.6 per cent, up a fraction.

The range is as wide as ever. City economists at Robert Fleming reckon national output will rise only 2.2 per cent in 1995, down from an estimated 3.9 per cent last year. At the other extreme, SG Warburg's team thinks the economy will grow faster, at 4.5 per cent, in 1995. The key difference is that Fleming is forecasting nearly flat consumer spending, which accounts for almost two-thirds of GDP.

Forecasters outside the City do not labour under the same pressure to differentiate their products, so their predictions are closer together and closer to the Treasury's outlook.