Forecasts for economy

The economy is expected to grow more slowly than forecast earlier, according to the Treasury’s summary of forecasts from around 40 independent institutions.

The October average (median) for growth as measured by gross domestic product (GDP) is 1.0% against 1.2% in September. The range of October forecasts runs from 0.6% growth up to 1.6% growth.

Inflation, as measured by the Retail Prices Index, is expected to be running at between 4.7% and 5.7% in the final quarter of the year; the midpoint or median forecast is 5.4%.

The range for the fourth quarter 2012 is lower but wider and runs from 1.7% to 4.5% with a median figure of 2.9%.

Forecasts for average earnings growth this year are for a 3.0% cut at the bottom end of the range up to 5.4% growth at the top, with a midpoint of 2.5%. Next year’s figures are for a cut of 0.5% up to 4.4%, with a midpoint estimate of 2.9%.

www.hm-treasury.gov.uk/d/201110forecomp.pdf