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UK growth forecast revised down UK growth forecast revised down
(20 minutes later)
The UK is "better placed than other economies" to weather financial storms, Chancellor Alistair Darling has said.The UK is "better placed than other economies" to weather financial storms, Chancellor Alistair Darling has said.
He made the claim as he admitted that the UK economy was now forecast to grow between 1.75%-2.25% this year - 0.25% below his forecast in October. His claim came as he cut by 0.25% his October forecast that the UK economy would grow by up to 2.5% this year.
Mr Darling also postponed for six months a 2p per litre fuel duty rise - but is expected to put up alcohol tax. Mr Darling also postponed for six months a 2p per litre fuel duty rise - but added an extra 0.5p rise from 2010 and is expected to put up alcohol duty.
In his first Budget he announced a big increase in borrowing - £12bn more than in last year's pre-Budget report. In his first Budget he also said Child Benefit would rise from April 2009 to £20 week - a year earlier than planned.
In the speech, which began at 1230 GMT, he is also expected to replace air passenger duty with a new tax on flights. In the speech, which began at 1230 GMT, he said the child element of the child tax credit for families on low and middle income would increase by £50 a year above inflation.
EXPECTED ANNOUNCEMENTS Above-inflation rise on alcohol dutiesDelay 2p rise in fuel duty for six monthsReplace air passenger duty with tax on flightsIntroduce 'showroom tax' of up to £2,000 on least fuel efficient vehiclesRequire supermarkets to charge for plastic bags if they do not scrap themMore cash to tackle child povertyHelp with rising energy costs for poorer families Key points at-a-glance KEY MEASURES Delay 2p rise in fuel duty for six monthsExpected Replace air passenger duty with tax on flightsExpected to introduce 'showroom tax' of up to £2,000 on least fuel efficient vehiclesRequire supermarkets to charge for plastic bags if they do not scrap themMore cash to tackle child povertyHelp with rising energy costs for poorer families Key points at-a-glance
A working family with one child on the lowest income will gain up to £17 a week, lifting 150,000 children out of poverty, said Mr Darling.
He also ordered energy companies to increase the help they give to people using pre-paid meters from £50m to £150m a year.
He delayed fuel duty increases but added: "For environmental reasons we will increase fuel duty by 0.5 pence per litre in real terms from 2010."
On the wider economy, he said inflation would rise before returning to its 2% target in 2009 and remain on target thereafter.
He said borrowing next year would rise to £43bn, 2.9% of national income - £7bn more than forecast last year - with a similar increase the following year.
Other predicted announcements include a requirement for supermarkets to charge for disposable plastic bags, if they do not voluntarily scrap them.Other predicted announcements include a requirement for supermarkets to charge for disposable plastic bags, if they do not voluntarily scrap them.
He is also expected to announce a "showroom" tax on up to £2,000 on the least fuel efficient vehicles.He is also expected to announce a "showroom" tax on up to £2,000 on the least fuel efficient vehicles.
Mr Darling is tipped to announce above-inflation rises on alcohol duties - in an effort to curb binge drinking.Mr Darling is tipped to announce above-inflation rises on alcohol duties - in an effort to curb binge drinking.
There may also be more money to tackle child poverty, amid warnings that the government could miss its target of halving child poverty by 2010.
Mr Darling is expected to provide help with rising energy costs for poorer families, which could mean limiting the tariffs paid on pre-paid gas and electricity meters.
Mr Darling took over as chancellor when Gordon Brown became prime minister last June.Mr Darling took over as chancellor when Gordon Brown became prime minister last June.
The Conservatives say Mr Darling's hands have been tied by the decisions of his predecessor, who they claim borrowed too much in order to fund public sector reforms.The Conservatives say Mr Darling's hands have been tied by the decisions of his predecessor, who they claim borrowed too much in order to fund public sector reforms.
The Lib Dems say the chancellor should do more to help Britain weather coming economic storms.The Lib Dems say the chancellor should do more to help Britain weather coming economic storms.