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Budget: UK is fastest growing economy -George Osborne Tax changes to boost pensioners and savers in Budget
(35 minutes later)
Britain is growing at a faster rate than any other advanced economy, Chancellor George Osborne has told MPs. Chancellor George Osborne has made tax-free savings in ISAs more "generous" and unveiled new "pensioner bonds".
He revised growth forecasts up to 2.7% in 2014 but warned the job of recovery was "far from done". Tax changes for "low and middle income" workers also featured in his Budget.
The Chancellor is delivering his fifth Budget in the House of Commons. The amount people earn before tax will go up by £500 to £10,500 and the 40p tax threshold will go up.
He is unveiling measures to shore up economic recovery and help working people with the cost of living - and more tax breaks to boost productivity. The chancellor froze petrol duty, cut bingo duty from 20% to 10%, froze duty on Scotch Whisky and cider and cut a further 1p from a pint of beer - but put the price of cigarettes up.
Cash and stocks ISAs are to be merged into a single New ISA with an annual tax-free savings limit of £15,000 from 1 July. The limit for Junior ISA will be raised to £4,000.
He also outlined a new Pensioner Bond paying market leading rates to be available from January to all over 65s, with interest rates of 2.8% for one-year bonds and 4% for three-year bonds.
Other measures announced in Mr Osborne's fifth Budget speech include:
Mr Osborne also unveiled plans to support economic recovery - including tax breaks to boost productivity, exports and manufacturing.
He said Britain was growing at a faster rate than any other advanced economy - revising growth forecasts up to 2.7% in 2014 - but he warned the job of recovery was "far from done".
He told MPs: "We are putting Britain right but the job is far from done. This country still borrows too much, we still don't invest enough, export enough or save enough."He told MPs: "We are putting Britain right but the job is far from done. This country still borrows too much, we still don't invest enough, export enough or save enough."
He added: "This is a Budget for building a resilient economy. If you're a maker, a doer or a saver: this Budget is for you.He added: "This is a Budget for building a resilient economy. If you're a maker, a doer or a saver: this Budget is for you.
"It is all part of a long term economic plan - a plan that is delivering security for the people of this country.""It is all part of a long term economic plan - a plan that is delivering security for the people of this country."
Surprise announcement? New pound coin
He said the Office for Budget Responsibility was forecasting that the economy would overtake its pre-crisis peak later this year.He said the Office for Budget Responsibility was forecasting that the economy would overtake its pre-crisis peak later this year.
The deficit would be lower than expected this year at 6.6% - and he said the government was on track to post a surplus of 0.2% in 2018/19, according to the OBR forecasts.The deficit would be lower than expected this year at 6.6% - and he said the government was on track to post a surplus of 0.2% in 2018/19, according to the OBR forecasts.
Aides have stressed that the Budget package will be "steady as she goes" but the BBC's Nick Robinson said the chancellor had kept a "big secret" to pull from his red box.
BBC business editor Robert Peston said the surprise announcement was likely to be in the area of personal taxation.
There has been speculation Mr Osborne will push up the level at which National Insurance contributions start being paid or even announce a cut to the 40% income tax rate.
Measures announced so far in Mr Osborne's fifth Budget speech include:
On the plans for a cap on welfare spending, he told a packed House of Commons: "Britain should always be proud of having a welfare system that helps those most in need.On the plans for a cap on welfare spending, he told a packed House of Commons: "Britain should always be proud of having a welfare system that helps those most in need.
"But never again should we allow its costs to spiral out of control and its incentives to become so distorted that it pays not to work.""But never again should we allow its costs to spiral out of control and its incentives to become so distorted that it pays not to work."
He is expected to unveil a cut to bingo duty from 20% to 15%, extra money for flood defences and a requirement for banks to refer businesses whose loan applications they reject to alternative lenders.
Mr Osborne insisted before the Budget that deficit reduction remained his number one priority, with the ultimate goal of delivering an annual budget surplus before 2020. Critics say he has missed targets and has borrowed billions more than originally planned in 2010.Mr Osborne insisted before the Budget that deficit reduction remained his number one priority, with the ultimate goal of delivering an annual budget surplus before 2020. Critics say he has missed targets and has borrowed billions more than originally planned in 2010.
In the run-up to the Budget, the government announced plans to offer up to £2,000 in subsidised childcare to working families after the next general election, a proposed rise in the hourly minimum wage to £6.50 and an extension of the Help to Buy Scheme for aspiring homebuyers.In the run-up to the Budget, the government announced plans to offer up to £2,000 in subsidised childcare to working families after the next general election, a proposed rise in the hourly minimum wage to £6.50 and an extension of the Help to Buy Scheme for aspiring homebuyers.
Labour Leader Ed Miliband said families had become £1,600 a year worse off under the coalition - and he urged the chancellor to unveil measures to ease the cost-of-living crisis in his Budget speech.Labour Leader Ed Miliband said families had become £1,600 a year worse off under the coalition - and he urged the chancellor to unveil measures to ease the cost-of-living crisis in his Budget speech.
Labour has pledged that if it wins the next election, it will reinstate the 10p tax rate for low earners and raise the top rate of tax to 50p for those earning more than £150,000 a year.Labour has pledged that if it wins the next election, it will reinstate the 10p tax rate for low earners and raise the top rate of tax to 50p for those earning more than £150,000 a year.
Do you have a Budget question for one of our experts? Email us at haveyoursay@bbc.co.uk adding 'Budget' in the subject heading and including your contact details.Do you have a Budget question for one of our experts? Email us at haveyoursay@bbc.co.uk adding 'Budget' in the subject heading and including your contact details.