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UK finance minister to detail annual budget; tax breaks for top and bottom earners expected
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.