1

GROWTH WILL BE WORSE THAN EXPECTED

Economic growth % OF GDP March 2011 forecast 6 4 2 0 -2 -4 -6 2002 December 2012 forecast

SO UNEMPLOYMENT WILL REMAIN HIGHER THAN WAS HOPED

Unemployment CLAIMANT COUNT, MILLIONS March 2011 forecast 2.0 1.8 1.6 1.4 1.2 1.0 December 2012 forecast

2004

2006

2008

2010

2012

2014

2016

2012

2013

2014

2015

2016

2017

OSBORNE WILL MISS HIS DEBT TARGET

Public sector net debt % OF GDP March 2011 forecast 80 78 76 December 2012 forecast

GOVERNMENT MUST BORROW MORE

Public sector net borrowing* BN March 2011 forecast 120 90 60 December 2012 forecast

100bn
more borrowing than expected in March this year
2016-17

74 72 70 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 30 0 2012-13 2013-14 2014-15 2015-16
*Excluding Royal Mail, Asset Purchase Facility, B&B, NRAM

OBRs 2010 growth estimate for 2012

2.8% -0.1%
Estimated growth for 2012 now

...AND, GIVEN THE OBRS RECORD, IT COULD BE EVEN WORSE

Vanishing growth % OF GDP 3.0 2.5 2.0 1.5 1.0 What the OBR forecast in ... Jun 2010 Nov 2010 Mar 2011 Nov 2011 Mar 2012 Dec 2012

340,000
extra dole claimants predicted for 2016

0.5 0 -0.5 2012 2013 2014 2015 2016

SOURCE: OBR