Chancellor George Osborne came to blows with the opposition at Wednesday's UK Budget announcement as he said the economy will grow half as fast this year as previously expected.

Osborne said the forecast for growth in 2013 had been cut to 0.6% from the 1.2% that the Office for Budget Responsibility (OBR) had predicted at the time of the Autumn Statement in December.

In his fourth Budget, the leader said his target to debt-as-percentage of GDP will now not fall until 2017.

Specifically, Osborne said public sector net debt is anticipated to be 75.9% of GDP this year, 79.2% next year, 82.6% the year after, and 85.1% in 2015-16. It will fall to 84.8% by 2017-18.

"Despite the recession in the Eurozone, the OBR central forecast today is that we avoid a second quarter of negative growth here in the UK," Osborne said.

"While less than we would like, our growth this year and next year is forecast by the IMF [International Monetary Fund] to be higher than France and Germany.

"It is a reminder that all Western nations live in very challenging economic times."

The OBR expects recovery to pick up to 1.8% in 2014, 2.3% in 2015, 2.7% in 2016 and 2.8% in 2017. However, it said the underlying situation remains "very fragile".

Opposition leader Edward Miliband slammed the reduced forecast, saying Osborne was the "wrong man in the wrong place".

However, Osborne said a rise in the employment rate was painting an brighter picture for the economy. Compared to this time last year, the OBR expects 600,000 more jobs in 2013.

"The employment rate has been growing faster than in the US and three times as fast as in Germany," Osborne said.

He also highlighted the reduction in the UK deficit which has fallen from 11.2% of GDP in 2009-10, to a forecast of 7.4% this year. It is expected to drop a further 6.8% next year and 5.9% in 2014-15.

RD

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