Drop in UK growth forecast limits chancellor’s budget wriggle room

OBR tells Jeremy Hunt he will have £9bn less income to factor in amid falling tax receipts

• Analysis: big budget giveaways look unlikely
• Energy support sets UK government borrowing record

The government’s economic forecaster has cut its prediction for UK growth this year, limiting the Treasury’s spending firepower in the forthcoming budget, according to a report.

In a move that will set the baseline for Treasury’s calculations before the budget in March, the Office for Budget Responsibility (OBR) is understood to have provided a preliminary outlook that shows a weaker rebound this year from a period of high inflation and falling living standards.