The outlook for the economy is “inherently uncertain” and recovery will be slower than after previous recessions, the UK’s tax and spending watchdog has warned. The Office for Budget Responsibility (OBR) said the impact of government measures – which include a hike in VAT to 20% and an £81bn package of spending cuts – would lead to “sluggish growth” in the medium term. But the OBR did slash its projections for public sector job cuts over the next four years from 490,000 to 330,000. The watchdog’s forecast – which will provide the fiscal framework for the budget in March – raised estimates for GDP growth in 2010 from 1.2% to 1.8%, but lowered growth in 2011 and 2012 from 2.3% to 2.1% and from 2.8% to 2.6% respectively.