OBR caps UK growth forecast at 1.2% but says five-year outlook bright

Forecaster's mid-term outlook buoyed by 50bn in tax increases, despite low growth and falling house prices in 2019

Britain's economy will struggle to grow by more than 1.2% this year as Brexit uncertainty hits business investment and sends house prices into reverse for the first time since the 2008 financial crash, the Office for Budget Responsibility has warned.

The Treasury's independent forecaster has cut its estimate of economic growth for 2019 from 1.6%, made only last October. It is also predicting a slide in house prices later this year, which will cut stamp duty tax receipts by 3bn. Brexit uncertainty and changes to the way corporation tax is paid, it said, will also knock a 2bn hole in tax payments made by companies.