George Osborne admits economic hopes revised down

The chancellor George Osborne has said short-term hopes for the economy have been revised down in recent weeks.

Speaking at a dinner held at the insurers Lloyd's of London, Mr Osborne said recent data had led to downward revisions, but that he would be sticking to his deficit-cutting plan.

He said: "We warned repeatedly that the recovery would be choppy."

Recent figures for retail spending, construction and output have all been weak.

Last week official figures showed the economy grew by just 0.2% in the three months to the end of June.

Earlier Mr George Osborne announced he will make his autumn statement on 29 November.

This will follow the Office for Budget Responsibility's (OBR) latest economic forecasts, which will be released earlier that day.

The OBR currently expects the UK economy to expand by 1.7% in 2011, but most economists forecast lower growth.

Buffeting

He told the Lloyd's of London audience: "While we have all had to revise down our short-term expectations over recent weeks, the only people who should be fundamentally re-examining their view of the world are those who thought that this time was different."

He said his programme was strong enough to withstand some economic buffeting, saying: "We set in train a plan that was comprehensive and clear in its vision, but also flexible enough to withstand shocks along the way."

He also claimed the UK was thinking ahead better than its European rivals: "We had an emergency budget last summer on our own terms - not this summer on the market's terms - unlike so many other countries."

Earlier, the shadow chancellor Ed Balls said: "It's time George Osborne got out of his denial and admitted that Britain now faces a growth crisis, as a senior minister let slip this week. And he should listen to the head of the IMF and one of the largest investment funds in the world [Pimco]who have warned that cutting too far and too fast risks economic recovery."

The chancellor uses his autumn statement to give an update on the state of the economy, as well as to respond to the latest analysis from the independent OBR.