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| Version 0 | Version 1 |
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| Brown predicts strong UK economy | Brown predicts strong UK economy |
| (about 1 hour later) | |
| The UK economy is set to grow between 2.5% and 3% during the next two years, Chancellor Gordon Brown has predicted. | The UK economy is set to grow between 2.5% and 3% during the next two years, Chancellor Gordon Brown has predicted. |
| This would see the UK economy grow faster than all other major economies in the world, he said. | This would see the UK economy grow faster than all other major economies in the world, he said. |
| Once again, though, he will miss his deficit target, with a £9.5bn shortfall instead of the forecast £7.9bn. | |
| However he can point to a £11bn budget surplus at the end of the current economic cycle, meeting the "golden rule" of borrowing only to invest. | |
| Previous economic cycles - from 1977 to 1986 and from 1986 to 1997 - had seen deficits of £140bn and £240bn respectively, the chancellor said. | Previous economic cycles - from 1977 to 1986 and from 1986 to 1997 - had seen deficits of £140bn and £240bn respectively, the chancellor said. |
| Ten years of growth | Ten years of growth |
| In his 11th and probably last budget as chancellor, Mr Brown highlighted his record of 10 consecutive years of growth. | In his 11th and probably last budget as chancellor, Mr Brown highlighted his record of 10 consecutive years of growth. |
| "The British economy is today growing faster than all the other G7 economies - growth stronger this year than the euro area, stronger than Japan and stronger even than America," he said. | "The British economy is today growing faster than all the other G7 economies - growth stronger this year than the euro area, stronger than Japan and stronger even than America," he said. |
| The growth rate predicted for the years from 2008, however, is slower than the 2.75% to 3.25% growth forecast for the current year. | |
| Before 1997 the UK had been "bottom in the G7 [group of industrialised nations] for national income per head - seventh out of seven, behind Germany, Italy, France, Canada and Japan". | Before 1997 the UK had been "bottom in the G7 [group of industrialised nations] for national income per head - seventh out of seven, behind Germany, Italy, France, Canada and Japan". |
| "Now we are second only to America and ahead of all these countries," Mr Brown said. | "Now we are second only to America and ahead of all these countries," Mr Brown said. |
| Weak government income | Weak government income |
| But given the strong performance of the economy, critics will be arguing that the Chancellor's fiscal position is relatively weak. | But given the strong performance of the economy, critics will be arguing that the Chancellor's fiscal position is relatively weak. |
| Mr Brown did indeed deliver on his promise of avoiding an economic boom and bust - albeit during a period in which the global economic climate was relatively benign. | Mr Brown did indeed deliver on his promise of avoiding an economic boom and bust - albeit during a period in which the global economic climate was relatively benign. |
| In fact, growth was so strong that last year he could propose to raise the "trend rate" of economic growth from 2.5% to 2.75%; that is the rate at which the UK economy can grow without running out of capacity and triggering inflation. | In fact, growth was so strong that last year he could propose to raise the "trend rate" of economic growth from 2.5% to 2.75%; that is the rate at which the UK economy can grow without running out of capacity and triggering inflation. |
| However, he had to cut back his tax revenue forecasts several times, which resulted in a small boom and bust in government spending. | However, he had to cut back his tax revenue forecasts several times, which resulted in a small boom and bust in government spending. |
| Starting in 1997 with a few years of tight-fisted spending, when the Chancellor kept to the previous Tory government's austere budget plans, Mr Brown then pushed up government spending sharply, especially on health and education. | Starting in 1997 with a few years of tight-fisted spending, when the Chancellor kept to the previous Tory government's austere budget plans, Mr Brown then pushed up government spending sharply, especially on health and education. |
| But the years of largesse are now over, and although government spending is still rising, to most departments the next three years will feel like a cutback. | But the years of largesse are now over, and although government spending is still rising, to most departments the next three years will feel like a cutback. |