Budget: British economy 'resilient'

Chancellor Alistair Darling revealed a deep set confidence within the British economy, believing it to be the most stable of all the G7 countries and much "better placed [and] prepared to deal with future shocks" than the others.

In what he called his "responsible budget," Darling welcomed the recent central bank action to inject further liquidity into the international markets.

Growth & inflation

The Chancellor explained that the Budget was "about equipping Britain for the times ahead," forecasting economic growth of between 1.75 and 2.75 per cent in the coming year to reflect the global economic slowdown. This compares with 3 per cent last year.

He said that there would be "no return" to the inflation rates of the early nineties, however conceded that inflation will continue to rise in the short-term with a view to returning to target by 2009.

However despite this admission, Darling outlined plans to write to Bank of England Governor, Mervyn King, to confirm that the inflation target would remain at its current 2 per cent limit - a move which would "entrench our commitment to low inflation."