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UK finance minister says 2012 GDP growth forecast raised to 0.8 pct, predicts 2 pct in 2013
LONDON (AP) ' Britain's finance minister says borrowing will fall modestly in the new financial year and that the country's economy will return to growth in the current quarter.
George Osborne, the chancellor of the exchequer, said in his budget speech Wednesday that the U.K.'s gross domestic product is expected to grow by 0.8 percent this year and 2 percent next year.
Citing forecasts by the independent Officer for Budget Responsibility, Osborne also said borrowing in the current fiscal year will be 126 billion pounds ($199 billion), a billion pounds less than his target. He forecast a drop to 120 billion pounds next year, then 98 billion pounds in 2014.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
LONDON (AP) ' Britain's finance minister was expected to announce tax breaks for both the top and the bottom of the nation's income scale Wednesday in his annual budget, but his room for maneuver was limited by the government's drive to slash borrowing and protect its AAA credit rating.
The latest figures on government borrowing sounded a discouraging note hours ahead of the budget speech by George Osborne, the chancellor of the Exchequer.
The Office for National Statistics said net borrowing in February was 15.2 billion pounds ($24.1 billion), more than predicted and higher than 8.9 billion pounds a year earlier.
That raised total borrowing for the first 11 months of the fiscal year to 110 billion pounds. While that still leaves room for Osborne to finish the year with borrowing just below the forecast of 127 billion pounds, it also shows government finances are weakening unexpectedly.
"Growth of tax receipts slowed and, after underspending for the rest of the financial year, departments appear to have had a final splurge," said Vicky Redwood, chief U.K. economist at Capital Economics.
February's borrowing raised Britain's national debt to 995 billion, edging it closer to the trillion-pound mark briefly crossed in December.
Budget speculation has focused on an expectation that Osborne will announce a cut in the 50 percent tax rate assessed on income above 150,000 pounds ($238,000). That rate potentially hits 43,000 taxpayers, the top 1 percent.
News reports says Osborne was also likely to announce an increase in the amount of income exempt from tax, which would be of greatest benefit to those with the smallest incomes.