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UK budget cuts corporation tax, hikes borrowing and knocks penny off a pint

22 March 2013   (0 Comments)
Posted by: Herman van Dyk
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By Colm Kelpie (Irish Independent)

Executive summary

UK Chancellor Osborne took aim at Ireland by slashing the corporate tax rate from 21pc next year to 20pc by 2015. The annual budget deficit had fallen from 11.2pc of GDP in 2009-10 to around 7.4pc this year.

 Full article

UK CHANCELLOR George Osborne has warned that the UK economy will grow half as fast as expected this year as he admitted recovery was taking longer than hoped.

And he turned to the Bank of England to help boost the fragile economy, stating it may have to use "unconventional monetary policy instruments" as he unveiled the budget to a rowdy House of Commons. That is likely to push down the value of the pound still further, making it harder for Irish exporters to the UK.

The Conservative Party chancellor said gross domestic product will grow by just 0.6pc, down from the 1.2pc projected in December. Next year will see growth of 1.8pc, down from the 2pc predicted in the government's autumn statement.

The sluggish growth figures mean borrowing will be higher than expected, making the target for slashing the deficit set by the government much more difficult.

But the chancellor also unveiled measures to boost investment, including £3bn on infrastructure spending.

He also took aim at Ireland by slashing the corporate tax rate from 21pc next year to 20pc by 2015, following on from a 10pc rate on profits from patents due to come in next month.

Mr Osborne said the measures would make the UK "one of the most internationally attractive places to innovate."

"This is a Budget that doesn't duck our nation's problems," Mr Osborne said.

"It confronts them head on. It is a Budget for an aspiration nation. It is a Budget for a Britain that wants to be prosperous, solvent and free."

The chancellor predicted that the deficit would continue to come down thanks to the "many tough decisions" taken by the government.

He said the annual budget deficit had fallen from 11.2pc of GDP in 2009-10 to around 7.4pc this year – a fall of a third. He predicted it would reach 2.2pc by 2017 or 2018.


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