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		</div><p><a href="http://londonglossy.com/wp-content/uploads/2010/11/public-sector-cuts-could-be-lower.jpg"><img class="alignnone size-full" title="Projections have been lowered for public sector job cuts" src="http://londonglossy.com/wp-content/uploads/2010/11/min-public-sector-cuts-could-be-lower.jpg" alt="Projections have been lowered for public sector job cuts"/></a></p>
<p>The Office for Budget Responsibility (OBR) could lower projections for public sector job cuts by nearly a fifth in revised forecasts for the economy, analysts have said.</p>
<p>The OBR &#8211; formed in May to make an independent assessment of the public finances ahead of each budget &#8211; is also expected to upgrade its economic growth forecasts for 2010 and reveal an overshoot in tax revenues, according to forecast group the Ernst &#038; Young ITEM Club.</p>
<p>The ITEM Club report, released ahead of the OBR&#8217;s autumn forecast, said the department could revise its estimates of public sector job losses &#8211; set out by Chancellor George Osborne in last month&#8217;s Comprehensive Spending Review (CSR) &#8211; down from 490,000 to 400,000.</p>
<p>Bigger-than-expected welfare cuts announced in the CSR, which did not feature in the emergency budget in June, mean 90,000 jobs could be saved, the ITEM Club said.</p>
<p>The OBR is likely to increase its GDP growth estimate for the whole year from the 1.2% forecast in June to nearer 1.7%, the ITEM Club said, while tax revenues are also expected to overshoot forecasts by £10 billion. Economic growth in the UK has slowed down over the year, although the most recent quarterly figure for GDP output was better than expected.</p>
<p>The Office for National Statistics said the British economy grew 0.8% between July and September, compared with 1.2% in the previous three months. The third quarter GDP growth eased fears of a double dip recession and reinforced Government hopes that the private sector will pick up the slack created in the economy by mammoth public spending cuts.</p>
<p>The OBR forecasts will provide the fiscal framework for the Government&#8217;s next budget in March. The Chancellor will respond to the revised figures in his autumn statement on Monday.</p>
<p>Peter Spencer, chief economic advisor to the Ernst &#038; Young ITEM Club, said the OBR forecast will provide further joy for the Coalition. He said: &#8220;Since the OBR&#8217;s forecast in June, we&#8217;ve seen an impressive recovery in the economy and a particularly impressive recovery in tax revenues, which will undoubtedly be reflected in a more optimistic outlook in the OBR&#8217;s forecast.&#8221;</p>
<p>The Chancellor announced in the CSR that additional welfare reforms would enable savings of £11 billion by 2014/15.</p>
<p>Mr Spencer said: &#8220;Buffering departmental budgets with an additional 3% of current spending will have saved some public sector jobs, assuming that there will be a similar balance between staffing and procurement costs, and a similar rate of public sector wage growth.&#8221;But he warned additional savings made to welfare reform will lead to a drop in household incomes.</p>
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