Darling defends economic growth forecasts

Chancellor Alistair Darling has maintained that the economic growth forecasts set out in his debut Budget remain ‘realistic.’

Darling told the Treasury Select Committee last week that he believed the UK economy could withstand the current economic slowdown, despite the well-publicised near collapse of US investment bank Bear Stearns.

‘Our economy remains fundamentally strong,’ he told the Committee.

The Chancellor also claimed that latest figures showing a fall in unemployment in the last month proved that the UK’s financial system remained ‘resilient.’

When delivering his Budget statement on 12 March, Darling predicted that the economy would grow by 1.75 - 2.25% in 2008, and by 2.25 - 2.75% the following year.

However, leading economists have criticised the Government’s economic targets for being ‘unduly optimistic.’

Defending his growth predictions, Darling said: ‘I think that the forecasts we have set out are reasonable and we have taken account of the uncertainty. I believe that what we have done is realistic.

‘If you look at the Treasury forecasts over the last few years they have been pretty good and have been recognised as such,’ he added.