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Budget March 2010 - the economy

  • Published: Wednesday, 24 March 2010

In his Budget Speech the Chancellor outlined economic forecasts for growth and inflation which he said were in line with Bank of England estimates. The Chancellor announced continued financial support aimed at households and businesses, as well as more plans to halve the level of public borrowing over four years.

Budget 22 June 2010

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Find out what the Budget does and what takes place on the day

The March 2010 Budget was the final Budget for the last Labour government. George Osborne, Chancellor of the new coalition government, delivered his first Budget on Tuesday 22 June 2010. The new Budget may affect some of the information below. To read about the June Budget, click the orange button.

Economic forecast of growth

The Budget sets out the Treasury’s forecast that the UK economy will grow by between 1 and 1.5 per cent this year, and from 3 to 3.5 per cent next year.

These estimates are in line with Bank of England estimates, the Chancellor said in his speech.

Inflation

The Chancellor said that inflation figures released on 23 March 2010 had shown a rise of three per cent.

He said that by the beginning of 2011, he is forecasting inflation to be back below two per cent. He said he is writing today to the Bank of England to confirm that the inflation target remains unchanged at two per cent.

Public finances

The Chancellor said that public borrowing has been allowed to rise as the government has supported the economy through the downturn, but in the medium term it must live within its means. 

At the Pre-Budget Report, the Chancellor said, he had forecast public sector net borrowing of £178 billion this year. He now expects public borrowing this year to be £11 billion lower than forecast, at £167 billion.

The Budget set out further plans to halve the level of public borrowing as a share of the economy over the next four years.

Continued support for the economy

The Treasury's forecast

The Chancellor forecast the UK economy to grow between 1 and 1.5 per cent this year, and from 3 to 3.5 per cent next year.

The latest economic data shows that the UK economy returned to growth at the end of last year.

In 2009, there was government support for the economy, aimed at minimising the impact of the recession on employment and repossessions.

Budget 2010 announces further targeted support for households, jobs and businesses to secure the UK’s economic recovery, and puts in place a platform for sustainable growth in the economy. 

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