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| Darling 'to cut growth forecasts' | Darling 'to cut growth forecasts' |
| (about 1 hour later) | |
| Chancellor Alistair Darling will have to cut his economic growth forecasts when he presents the Budget on Wednesday, analysts have predicted. | |
| With the economy hit by the continuing global credit squeeze and higher energy and food bills, commentators also predict no real surprises. | With the economy hit by the continuing global credit squeeze and higher energy and food bills, commentators also predict no real surprises. |
| Investec Securities economist Philip Shaw said Mr Darling will most likely cut forecasts for the next two years. | Investec Securities economist Philip Shaw said Mr Darling will most likely cut forecasts for the next two years. |
| Reports suggest that new tax-raising green measures could also be unveiled. | |
| 'Economy faltering' | 'Economy faltering' |
| Mr Darling has already cut his economic growth forecast for 2008 to 2%-2.5% from the previous 2.5%-3%, but Mr Shaw expects a further reduction. | Mr Darling has already cut his economic growth forecast for 2008 to 2%-2.5% from the previous 2.5%-3%, but Mr Shaw expects a further reduction. |
| Full Budget special report | Full Budget special report |
| Fellow economist Howard Archer, of Global Insight, agrees, saying Mr Darling will blame factors outside his control. | Fellow economist Howard Archer, of Global Insight, agrees, saying Mr Darling will blame factors outside his control. |
| "Darling is likely to attribute much of the UK slowdown to a weaker global growth, tighter lending conditions influenced markedly by the US subprime mortgage crisis, and high energy, food and commodity prices," said Mr Archer. | "Darling is likely to attribute much of the UK slowdown to a weaker global growth, tighter lending conditions influenced markedly by the US subprime mortgage crisis, and high energy, food and commodity prices," said Mr Archer. |
| He added that as a result, "it is unlikely that the chancellor will be prepared to enact major tax raising measures and/or public spending cuts at a time when the economy is faltering markedly". | He added that as a result, "it is unlikely that the chancellor will be prepared to enact major tax raising measures and/or public spending cuts at a time when the economy is faltering markedly". |
| Mr Darling is facing a Budget deficit of £38bn, and a slowing economy will make it much more difficult for him to bring the government finances back into balance. | |
| So in the longer term, taxes may have to go up, or spending cut back, to meet the shortfall. | |
| Green taxes | Green taxes |
| Reports suggest that one of the most likely Budget announcements will be an additional £2,000 tax on the least fuel-efficient cars. | Reports suggest that one of the most likely Budget announcements will be an additional £2,000 tax on the least fuel-efficient cars. |
| HAVE YOUR SAYI would like to see life made easier and simpler for the old age pensioner Saqib Khan, Essex Send us your comments | HAVE YOUR SAYI would like to see life made easier and simpler for the old age pensioner Saqib Khan, Essex Send us your comments |
| There are also suggestions that supermarkets will be required to charge for disposable plastic bags if they do not voluntarily scrap them. | There are also suggestions that supermarkets will be required to charge for disposable plastic bags if they do not voluntarily scrap them. |
| Such measures may not please consumers, if a survey released on Tuesday by market research firm YouGov is to be believed. | Such measures may not please consumers, if a survey released on Tuesday by market research firm YouGov is to be believed. |
| Speaking to 2,000 people, YouGov said a majority saw such green taxes as a primarily a means to boost the government's finances. | Speaking to 2,000 people, YouGov said a majority saw such green taxes as a primarily a means to boost the government's finances. |
| Binge drinking | Binge drinking |
| Mr Darling is also predicted to raise the duty on alcohol to address public concern at binge drinking. | Mr Darling is also predicted to raise the duty on alcohol to address public concern at binge drinking. |
| CORPORATION TAX RATES Italy 37.2%Germany 29.8%UK 28%Netherlands 25.5% | CORPORATION TAX RATES Italy 37.2%Germany 29.8%UK 28%Netherlands 25.5% |
| The Conservatives said last week they would raise tax on super-strength beer, cider and alcopops to tackle binge drinking if they won the next general election. | The Conservatives said last week they would raise tax on super-strength beer, cider and alcopops to tackle binge drinking if they won the next general election. |
| The chancellor is further expected to provide help for poor families hit by higher energy costs. | The chancellor is further expected to provide help for poor families hit by higher energy costs. |
| This could come in the form of reducing the difference between what energy companies charge pre-payment customers and those who pay by direct debit. | This could come in the form of reducing the difference between what energy companies charge pre-payment customers and those who pay by direct debit. |
| Analysts are divided over whether Mr Darling will also press ahead with a 2p-a-litre rise in fuel duty. | Analysts are divided over whether Mr Darling will also press ahead with a 2p-a-litre rise in fuel duty. |
| Corporation tax | Corporation tax |
| Mr Darling also faces a demand from business to cut corporation tax. | Mr Darling also faces a demand from business to cut corporation tax. |
| But dramatic tax cuts look unlikely, given economic uncertainty and strained public finances. | But dramatic tax cuts look unlikely, given economic uncertainty and strained public finances. |
| The Confederation of British Industry (CBI) has said that high taxes on business are damaging the UK economy. | The Confederation of British Industry (CBI) has said that high taxes on business are damaging the UK economy. |
| It wants corporation tax cut from 28% to 18% by 2016 and a simpler system introduced. | It wants corporation tax cut from 28% to 18% by 2016 and a simpler system introduced. |
| However, unions say a cut in corporation tax would lead to tax hikes for "ordinary people". | However, unions say a cut in corporation tax would lead to tax hikes for "ordinary people". |