Budget 2014 – Economic overview

The economic recovery is well underway according to the figures with GDP growth particularly strong. The government’s long term economic aim was to build a stronger, more competitive economy and the indications were that this is being achieved, albeit not painlessly.

Aided by the Office for Budget Responsibility, revised forecasts show the following:

  • Forecast for GDP growth in 2014 up to 2.7% (growth was 1.8% in 2013)
  • GDP to return to pre-crisis peak in 3rd quarter of 2014
  • Public sector net borrowing fell by half from its 2009/10 peak and a small surplus of 0.2% is forecast for 2018/19
  • Employment forecast to reach 31.4 million by 2018
  • Unemployment claimant count set to fall below 1 million in 2017 for the first time since 2008
  • Inflation set to remain at 2% target (Consumer Prices Inflation)

Much work is still to be done in reducing the deficit although today’s figures show that progress is being made in reversing the unprecedented rise in borrowing.

We welcome the measures to help boost investment, particularly the increase in Annual Investment Allowance to £500,000 although, with a couple of exceptions, felt that today’s Budget contained a lot of tinkering around the edges..