Chancellor of the Exchequer Gordon Brown claims Great Britain now has the healthiest inflation level for over a century and has climbed the table to have the 2nd highest economic growth of the G7.
In his 11th Budget speech, Brown says the UK has maintained its inflation target of 2.5-3%, compared with a peak of 4.7% in the US and 3.3% across the G7 and is set to be on course to meet its 2008/09 target.
"I can report the British economy is growing faster than all other G7 countries," says Brown.
"By holding some of our commitments and discipline on public sector pay, we have created the conditions for the low mortgage and interest rates which since 1997 have been half of the old boom and bust," he adds.
As part of the government’s key economic data, Brown says overall investment in the UK is up 17.5% of national income, 7% of which comes from business, and the productivity gap between Japan and America has closed while halving compared with France.
The UK is now said to have a surplus of £11bn, while debt levels are scheduled to be:
- 38% in 2007/08
- 38.5% in 2008/09
- 38.8% in 2009/10
- 38.6% in 2010/11.
At the same time, Britain net’s borrowing will fall from £35bn this year to £24bn by 2011, and while benefits used to account for 75% of public spending, Brown says it will now account for just 25%.
Some of the new funding needed to raise the public spending - rising from £43bn to £60bn in 2011 - will be partly financed by the sale of the £6bn student loan book to a private company, Brown has also confirmed.
Spending on defence will also rise to £2.25bn - including £86m towards counter terrrorism - along with another £400m for armed forces in key war zones.
An additional £8bn is also be allocated for spending on the NHS this year, increasing spending by 7% in real terms so by 2011 there will also be an extra £10bn in spending a year.IFAonline
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