This content is not available in your region

Stronger UK growth forecast as government unveils voter focused budget

Stronger UK growth forecast as government unveils voter focused budget
Text size Aa Aa

Britain’s economy is set to expand faster than previously predicted.

The government’s Office for Budget Responsibility is forecasting growth of 2.7 percent this year. The Bank of England’s prediction is even rosier at 3.4 percent.

That meant finance minister George Osborne was able to crow of a solid recovery as he presented his annual budget plans.

The Chancellor of the Exchequer, as he is official known, told lawmakers in parliament: “We are now growing faster than Germany, faster than Japan, faster than the United States; in fact there is no major advanced economy in the world growing faster than Britain today.”

Despite that Osborne warned Britain’s public finances remain far from healthy, so he will continue cutting government spending.

In more good news for the government, Britain’s jobless rate held stable at 7.2 percent of the workforce in the three months to January.

Average earnings picked up, but not as much as inflation making living standards a key battleground for next year’s elections.

Britain goes to the polls in May 2015 and the annual budget plan is one of the government’s last opportunities to make a difference to how people feel about their finances before then.

With an eye to voters Osborne promised help for savers, tax breaks for manufacturers and lower taxes on beer and bingo.

His help to savers – who have been hurt by near-zero interest rates – included an easing of requirements on pensioners to buy annuities.

Government savings accounts which will pay above-market interest rates to people aged over 65 have also been created.

Shares in insurance firms fell on the announcement.

Shares in gambling firms also weakened on news of a new tax for the industry, even as Osborne cut a levy on bingo.

The Labour opposition said the budget failed to help ordinary people.

Labour leader Ed Miliband said: “Today the chancellor (Osborne) simply reminded people of the gap between his rhetoric and the reality of peoples’ lives – living standards falling for 44 out of 45 months under this prime minister, unmatched since records began. No amount of smoke and mirrors can hide it.”