The UK’s businesses will be spending less than was predicted last year, according to new figures published in today’s Budget.
The Office for Budgetary Responsibility has lowered its forecasts for business investment which are published in the Budget document.
Business investment includes spending by companies on construction work.
The OBR, which provides forecasts for the UK economy, said business investment would rise by 1.9 per cent from 2012 to 2013 rather than the 6.4 per cent increase it had predicted for that period in the last year’s Budget.
It expects business investment to grow 6.1 per cent in 2014 rather than the 8.9 per cent previously forecast. In 2015 it said the rise would be 8.6 per cent rather than 10.2 per cent and in 2016 it expects an 8.6 per cent increase rather than 10.1 per cent.
However, the OBR said business investment is likely to have grown by more than expected in 2012 – 4.9 per cent rather than 0.7 per cent – meaning growth would be slower in future years.
It also downgraded forecasts for economic growth for the next four years from the predictions it made in the 2012 Budget. But it said the UK would avoid a triple-dip recession.
The OBR halved its growth prediction for 2013 from 2.0 to 0.6 per cent. It also revised down its forecast for the following years, reducing 2014’s figure from 2.7 per cent to 1.8 per cent, from 3.0 per cent to 2.3 per cent in 2015 and from 3.0 per cent to 2.7 per cent in 2016.
The OBR said poor exports and consumer spending caused by tight household finances meant it had also revised down some of the predictions it made in the autumn statement at the end of 2012.