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| Version 1 | Version 2 |
|---|---|
| Brown upbeat on UK growth outlook | Brown upbeat on UK growth outlook |
| (about 1 hour later) | |
| The UK economy is set to surprise people who thought that 2006 would be "a period of low growth", Chancellor Gordon Brown has said. | |
| In an interview with the Financial Times newspaper, Mr Brown said that the balance of growth across the UK was better than it had been in the past. | |
| The Treasury had predicted that growth would be between 2% and 2.5% in 2006. | |
| Mr Brown told BBC Radio 4's Today programme he would aim to keep inflation low despite strong growth. | |
| Inflation target | Inflation target |
| Mr Brown's views on the improved outlook for UK growth are shared by a number of analysts, who are also predicting that expansion will pick up next year. | Mr Brown's views on the improved outlook for UK growth are shared by a number of analysts, who are also predicting that expansion will pick up next year. |
| According to the FT, analysts on average expect the UK economy to grow by 2.6% this year. | According to the FT, analysts on average expect the UK economy to grow by 2.6% this year. |
| Going forward, the rate of growth should accelerate, and earlier this week the influential Ernst & Young Item Club forecasting group said it now expected the UK would grow by 2.9% next year, compared with an earlier prediction of 2.6%. | Going forward, the rate of growth should accelerate, and earlier this week the influential Ernst & Young Item Club forecasting group said it now expected the UK would grow by 2.9% next year, compared with an earlier prediction of 2.6%. |
| We must keep inflation low and that's why the public sector pay settlements will have to be in the framework of a 2% inflation target Gordon Brown | We must keep inflation low and that's why the public sector pay settlements will have to be in the framework of a 2% inflation target Gordon Brown |
| Worries remain, however, and BBC economics editor Evan Davies said that the UK's quicker-than-expected rate of inflation had increased expectations of higher interest rates. | Worries remain, however, and BBC economics editor Evan Davies said that the UK's quicker-than-expected rate of inflation had increased expectations of higher interest rates. |
| He explained that some analysts were talking of interest rates climbing to between 5.5% and 6%. | He explained that some analysts were talking of interest rates climbing to between 5.5% and 6%. |
| Questions also have been raised over the state of public finances and how the government plans to finance its spending plans. | Questions also have been raised over the state of public finances and how the government plans to finance its spending plans. |
| Speaking on Today, Mr Brown said that the government would look to get price growth back in line with its 2% inflation target. | |
| One way to do that, he explained, was to ensure that public sector wages did not create inflationary pressures. | One way to do that, he explained, was to ensure that public sector wages did not create inflationary pressures. |
| "We must keep inflation low and that's why the public sector pay settlements will have to be in the framework of a 2% inflation target," Mr Brown said. | "We must keep inflation low and that's why the public sector pay settlements will have to be in the framework of a 2% inflation target," Mr Brown said. |