UK set to grow faster in 2014 and next year
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BRITAIN is set to grow faster than expected this year and next, Chancellor of the Exchequer George Osborne said in his annual budget yesterday, drawing battle lines before national polls in 2015.
Osborne warned, however, that an escalation of the Ukraine crisis could harm British output and push up low inflation as he addressed parliament on the coalition government’s latest tax and spending plans.
Britain’s recovery would be harmed also by the Conservative-led coalition pulling away from deep cuts to state spending aimed at wiping out the country’s huge deficit inherited from the opposition Labour party, he said.
In moves to woo voters ahead of next year’s general election, Osborne unveiled plans that would see workers paying less income tax and offer more choice to retirees on how they draw their private pensions.
He also outlined incentives for savers hit by the Bank of England’s record low 0.5 percent interest rate.
“We are now growing faster than Germany, faster than Japan, faster than the United States. In fact there is no major advanced economy in the world growing faster than Britain today,” Osborne said.
But “faster growth alone will not balance the books ... there will have to be more hard decisions, more cuts.”
On Ukraine tensions, Osborne said “an escalation risks higher commodity prices, higher inflation and lower growth. It is a reminder of why we need to build our economy’s resilience.”
The British economy was set to grow 2.7 percent in 2014, up from the previous forecast for expansion of 2.4 percent, said Osborne, 14 months ahead of national polls.
The economy was then predicted to grow by 2.3 percent in 2015, upgraded from the previous growth estimate of 2.2 percent. The economy had expanded in 2013 by 1.8 percent, the fastest growth rate since before the global financial crisis.
Also yesterday, the Treasury unveiled plans for a new 12-sided 1-pound coin, which is “the most secure coin in circulation.”
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