OBR raises 2010 but trims 2011 growth forecasts

The independent Office for Budget Responsibility (OBR) has raised its estimate for economic growth this year to 1.8% from 1.2%.

However, the body has downgraded its forecasts for both 2011 and 2012, from 2.3% to 2.1%, and from 2.8% to 2.6% respectively. Despite the longer-term downgrades, the OBR said the economy has performed well over the last few months. "The UK economy has recovered more strongly since the spring than the interim OBR expected at the time of the June Budget," it said. "GDP growth was greater than expected in both the second and third quarters." It added unemployment has fallen to levels it did not expect to see until the middle of 2012. The expected number of public sector job losses ove...