LONDON: The UK economy will contract by 0.1 per cent this year, according to the Office for Budget Responsibility, the independent body that makes economic forecasts for the government, British Broadcasting Corporation reported on Wednesday..
It is a big revision from the time of the Budget in March, when it said that the economy would grow 0.8 per cent this year.
Chancellor George Osborne announced the changes to the forecast in his Autumn Statement.
Growth forecasts for the next five years were also cut.
Osborne quoted the OBR as saying: "The weaker than expected growth can be more than accounted for by over-optimism regarding net trade".
The OBR had previously forecast that the eurozone's economy would recover in the second half of this year. However, its continued contraction has hit the UK's exports to the eurozone.
On borrowing figures, the chancellor said that debt would not begin to fall as a proportion of the country's output until 2016-17, which is a year later than the government's target.
