OBR predicts that the UK will avoid recession

Britain will avoid a recession this year, according to an Office for Budget Responsibility (OBR) forecast.

The report says GDP will fall by 0.2% this year, with this far lower that the 1.4% downturn it predicted in November.

In the longer term, the report says the economy will grow by 1.8% in 2024, 2.5% in 2025 and 2.1% in 2026.

The Government’s independent forecaster believes that inflation will fall to 2.9% by the end of the year, with this lower than the 3.8% forecast in November and much closer to the Bank of England’s 2% target.

The OBR also said that household incomes – once rising prices are taken into account – will drop by 6% this year and next, with living standards not set to recover to pre-pandemic levels until 2027.

Chancellor Jeremy Hunt said the predictions from the OBR were proving the doubters wrong.