UK Growth Forecast Cut By Half In New Budget

Despite the UK’s growth forecasts being downgraded, Chancellor George Osborne has insisted his economic plan is working.

A planned fuel duty has been cancelled and corporation tax has been cut to 20%, in a package of measures the chancellor says is aimed at "those who want to work and get on".

Alcohol duty rises have also been cancelled and the price of beer cut by 1p a pint.

In a Commons described as "rowdy", Osborne said he wanted to "level" with people about "hard decisions" that had to be taken, saying, "we are, slowly but surely, fixing our country's economic problems".

His economic forecast for growth in 2013 is now 0.6%; half the 1.2% he predicted four months ago in his autumn statement.

The UK's national debt will also rise to 85% of GDP and won’t start coming down until 2017/18 - a year later than previously predicted.

A £10,000 income tax threshold will be introduced in 2014, a year earlier than planned, aimed at helping "hard working" people on low incomes.

And in a move Mr Osborne described as "taking tax off jobs", small businesses will get a £2,000 allowance for firms before paying employer National Insurance contributions.

There will also be an extension of shared equity schemes to help homebuyers.

And while keeping its 2% inflation target, the Bank of England Monetary Policy Committee had been given an updated broader remit.

Responding to some of the measures revealed in the Budget Labour leader Ed Miliband attacked it as a "more of the same Budget from a downgraded chancellor".


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