In his maiden Budget speech Chancellor Alistair Darling insisted that he could steer Britain through the current economic storm, but conceded that growth forecasts would be lower than expected.

The Chancellor told MPs that the credit crunch, which originated in America’s sub-prime housing market, posed a ‘major risk to the world’s economy’.

As a consequence, Darling has revised the economic growth predictions that were forecast in his Pre-Budget Report last October, yet stressed the UK is ‘well placed’ to withstand the global slowdown.

Growth forecasts have been cut for 2008 to 1.75%-2.25%, a substantial reduction of the 2.5%-3% that was originally envisaged. Darling has also advised that public borrowing will increase to £43 billion next year, rather than fall to the £36bn he had anticipated.

However, the British Chamber of Commerce (BCC) claims the Chancellor’s Budget economic forecasts ‘remain unduly optimistic.’

Commenting on today’s revisions David Kern, economic adviser to the BCC, said: ‘In the area of public finances the total borrowing figures, £36 billion for 2007/08 and £43 billion for 2008/09, are realistic and the Chancellor was right to allow an increase in borrowing in the next financial year.

‘However, the subsequent sharp reduction in borrowing beyond 2009 is again unduly optimistic. It is also disappointing that the Chancellor has not taken the opportunity to announce a significant move towards a more realistic set of fiscal rules,’ he added.