LONDON: Britain’s economy will grow faster than expected in the run-up to next year’s general election, Finance Minister George Osborne said in a vote-chasing budget aimed at wooing pensioners and savers.
Chancellor of the Exchequer Osborne hiked his 2014 and 2015 economic growth forecasts and cut his borrowing targets, but vowed to maintain austerity as he addressed parliament on the coalition government’s tax and spending plans.
Osborne warned the recovery would be jeopardized if the Conservative-Liberal Democrat coalition pulled away from deep spending cuts, which are aimed at eliminating the huge deficit inherited from the opposition Labour party in 2010.
However, with Labour edging ahead in recent opinion polls, Osborne — a senior member of Prime Minister David Cameron’s Conservatives — sought to deliver eye-catching measures in his fifth annual budget before the May 2015 election. “We are now growing faster than Germany, faster than Japan, faster than the US. In fact there is no major advanced economy in the world growing faster than Britain today,” Osborne said.
But he stressed: “Faster growth alone will not balance the books… there will have to be more hard decisions, more cuts.”
The Chancellor unveiled various incentives for savers, whose returns have slumped since the Bank of England slashed its key interest rate to the current record-low 0.50 percent five years ago.
He outlined plans to offer more choice to retirees on how they draw their private pensions, and signalled the creation of a new pensioners’ savings bond that will offer attractive rates.
Osborne also lifted the level at which workers start to pay income tax to £10,500 (12,550 euros, $17,500) per year from 2015/2016.