Statistics and arguments surround economic predictions


Statistics and arguments surround economic predictions

That phrase 'lies, damned lies and statistics' is an apt one to describe the arguments that have erupted over the health of the UK economy.

Former Chancellor Alistair Darling has been waiting all weekend for the arrival of the latest projections from the Office for Budget Responsibility (OBR) hoping they would show things are not as bad as the current government makes out.

You might think that projected growth figures are best left to politicians to argue over but the consequences of whoever wins the debate will hit the channel where it hurts in the form of taxes. A rise in VAT is one prospect that seems to be gathering momentum and the OBR numbers will support that increase if the current government decides to introduce it.

The main highlight from the OBR analysis is the expectation that the economy would grow at a rate of 2.6% in 2011 rather than Darling's earlier forecast of 3.25%. Despite that the number was slightly better than the 2.5% most people in the know had braced themselves for.

The numbers will no doubt be quoted in next week's emergency budget with George Osborne the current chancellor able to wax lyrical about how the previous government got it wrong.

But for those of us who don't get paid to read reports and hang around corridors in Westminster arguing about these things are only really worried about one thing which is how the government will navigate through the dangerous waters of a double dip recession and encourage growth to return. Do that and you can spend all the time you want talking about numbers.

This was first published in June 2010

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