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The Progressive Policy Think Tank

Economic update - January 2012: Outlook not all bad

A year ago economists were too optimistic about the outlook for the UK economy. They expected a drag on spending from the increase in the standard rate of VAT to 20 per cent and from public spending cuts, but most thought the economy would expand at an annual rate of around two per cent in 2011. The outturn is likely to be less than one per cent.