wpid-Economy.jpgBritain is growing at a faster rate than any other advanced economy, Chancellor George Osborne has told MPs.

He revised growth forecasts up to 2.7% in 2014 but warned the job of recovery was “far from done”.

The Chancellor is delivering his fifth budget in the House of Commons.

He is expected to unveil measures to shore up economic recovery and help working people with the cost of living – and more tax breaks to boost productivity.

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.”

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 predicted to be in Mr Osborne’s fifth Budget speech include:

  • A cut to bingo duty from 20% to 15%
  • Extra money for flood defences
  • A requirement for banks to refer businesses whose loan applications they reject to alternative lenders
  • Help for businesses to cut energy bills and fresh tax breaks to boost productivity
  • A scheme to boost exports

The chancellor is also expected to give more details of a proposed five-year cap on structural welfare spending from 2015.

The Budget comes amid a strengthening economic recovery, with inflation falling and growth this year projected to be among the strongest of any Western economy.

Deficit ‘priority’

The latest official figures, released on Wednesday, show unemployment fell by 63,000 in three months to January.

Business groups have forecast that the UK’s total economic output will exceed its pre-recession peak in the second quarter of 2014 after the economy grew by 1.9% in 2013.

But a Treasury source said that despite the economic recovery, the UK was still borrowing too much and difficult decisions would have to be made.

Mr Osborne has insisted deficit reduction remains his number one priority, with the ultimate goal of delivering an annual budget surplus before 2020. But 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.

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.

Source BBC

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