The new round-up of independent economic forecasts have been published by the Treasury.
The two charts below show the average independent forecast for GDP growth in 2012 and the average independent forecast for claimant count unemployment in Q4 2012 as they have been over the past year.
Just six months ago the economy was expected to grow by 2.1% next year; the new forecast is just 0.6% – a staggering downgrade in such a short time. Over the same time period independent forecasters have revised up their estimate of the number of the claimant count by over 200,000.
What does this huge growth downgrade mean for the deficit?
Slower growth and higher unemployment means bringing down the deficit is much harder and as a result forecasters have revised their estimate of next year’s deficit by around £20bn.
These new forecasts certainly won’t make for happy Christmas reading in the Treasury.