Stratford-based chartered accountancy firm Murphy Salisbury have given a cautious welcome to key statements on how the UK economy is faring and its prospects for the future.

The Office for Budget Responsibility (OBR), established by the coalition government to make independent assessments of the public finances and economy, yesterday issued its latest economic and fiscal outlook report, followed by Chancellor of the Exchequer George Osborne's autumn statement.

The OBR revised its forecast upwards for UK economic growth this year, from 1.2 per cent to 1.8 per cent, revised down its prediction for public sector job losses, from 490,000 to 330,000 over the next four years and said inflation would stabilise at 2 per cent from 2013.

Mr Osborne said that although economic conditions remained "challenging", recovery was on track as the UK moved "from an economy based on debt to an economy where we invest and export". He also announced measures to consult with businesses on streamlining the business tax regime while a major review will examine how all parts of government can remove barriers for entrepreneurs and innovators.

Steve Smith, senior partner at Murphy Salisbury, said: "Although the OBR says the recovery will be sluggish, we are still heading in the right direction and the danger of a double dip recession seems to be less likely.

"Businesses of all sizes and sectors will welcome the government's plans to simply the business tax regime and to introduce, from April 2013, a lower 10 per cent corporate tax rate on profits from newly-commercialised patents - a real incentive to innovate and create.

"It is also encouraging to see that the OBR has faith in the private sector to more than compensate for job losses in the public sector. With the government reviewing how it can make life easier for businesses, the small and medium-sized firms that are the lifeblood of the UK economy will have a key role to play in the recovery."