This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at http://www.bbc.co.uk/go/rss/int/news/-/news/business-12830224
The article has changed 6 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Osborne cuts fuel duty in Budget | |
| (40 minutes later) | |
| Budget & you | |
| The UK economy will grow more slowly this year than previously forecast, the Chancellor George Osborne has said. | The UK economy will grow more slowly this year than previously forecast, the Chancellor George Osborne has said. |
| The independent Office for Budget Responsibility (OBR) forecast 1.7% growth in 2011, compared with its previous estimate of the 2.1%. | The independent Office for Budget Responsibility (OBR) forecast 1.7% growth in 2011, compared with its previous estimate of the 2.1%. |
| This is more in line with market analysts' forecasts. | This is more in line with market analysts' forecasts. |
| The downgrade was due to slower growth at the end of last year, higher commodity prices and higher-than-expected inflation, Mr Osborne said. | The downgrade was due to slower growth at the end of last year, higher commodity prices and higher-than-expected inflation, Mr Osborne said. |
| Growth next year would be 2.5%, compared with the previous forecast of 2.6%, and 2.9% in 2013, in line with the last estimate, the chancellor said. | Growth next year would be 2.5%, compared with the previous forecast of 2.6%, and 2.9% in 2013, in line with the last estimate, the chancellor said. |
| Higher borrowing | |
| Delivering his second Budget, he also revealed that government borrowing would be lower this year than previously thought, but would be higher in subsequent years. | Delivering his second Budget, he also revealed that government borrowing would be lower this year than previously thought, but would be higher in subsequent years. |
| The OBR expects public sector net borrowing to come in at £146bn for the current financial year, slightly less than the previous estimate of £148.5bn. | The OBR expects public sector net borrowing to come in at £146bn for the current financial year, slightly less than the previous estimate of £148.5bn. |
| Figures released this week showed that the total for the financial year to the end of February was £123.5bn. | Figures released this week showed that the total for the financial year to the end of February was £123.5bn. |
| In the following years, however, borrowing will be higher than previously forecast, at £122bn in 2011-12, against the last estimate of £117bn, £101bn in 2012-13 (compared with £91bn), £70bn in 2013-14 (£60bn), £46bn in 2014-15 (£35bn) and £29bn in 2015-16 (£18bn). | In the following years, however, borrowing will be higher than previously forecast, at £122bn in 2011-12, against the last estimate of £117bn, £101bn in 2012-13 (compared with £91bn), £70bn in 2013-14 (£60bn), £46bn in 2014-15 (£35bn) and £29bn in 2015-16 (£18bn). |
| "The borrowing numbers are a bit higher than expected despite the fact that the Budget is supposedly fiscally neutral," said Jonathan Loynes at Capital Economics. | |
| "And yet they're still dependent on a pretty strong pick up in GDP growth in the next few years. I guess that suggests that the fiscal plans are vulnerable to weaker-than-expected out-turns in the economy." | |
| 'Growth stimulus' | |
| The government is about to embark on a massive programme of spending cuts in order to cut the budget deficit. | |
| As a result of these announced cuts, he said the market interest rate on UK debt was 3.6%. | |
| Other countries that did not address their deficits quickly enough, such as the Republic of Ireland and Portugal, "had seen their debt ratings downgraded and borrowing costs soar", the chancellor said. | |
| "This is our stimulus for economic growth," he said. | |
| Mr Osborne said the government was on course to meet its target of eliminating the budget deficit, which stood at 11.1% of GDP last year, within the next five years. | |
| He said the government's policies had rescued the economy and brought economic stability. | |
| "Without stability, there can be no growth and no new jobs," he said. | |
| Opponents of the cuts argue that they will undermine the stuttering economic recovery and see unemployment rise. | |
| The chancellor also revealed that the OBR did not expect the rate of inflation, currently at 4.4%, to drop back to the government's 2% target until 2013 - contrary to the Bank of England's belief that it will fall back during 2012. |