George Osborne, Britain’s Chancellor of the Exchequer, has delivered his sixth budget to Parliament and to the country.
Here’s a summary of the key points and announcements from his statement:
The state of the economy
Growth for 2015 was revised up to 2.5% from 2.4% in the autumn statement. The economy is forecast to grow 2.3% next year before reaching 2.4% in 2019.
This is certainly good news for the Chancellor. As the British economy continues to grow, increasing tax revenues will begin to replenish and consolidate the government’s fiscal position. However, the Chancellor cautiously contends that the “sun is only just beginning to shine”. That said, in 2014, Britain was the fastest growing economy in the G7.
Inflation is projected to fall to 0.2% in 2015 and for the next three years. The Bank of England’s inflation target remains at 2%.
Low and stable inflation may be positive for the Chancellor, businesses and households. However, this is considerably below the 2% inflation target. How great the risk of Britain slipping into deflation remains unclear as of yet, but not an impossibility.
Record levels of employment in the UK, with jobless rate to fall to 5.3% this year.
The deficit has halved since 2010 as a share of national income, yet there is still a long way to go. An additional £30bn of savings is needed in the next Parliament.
Public spending squeeze is set to end a year earlier than planned in 2019-2020, with spending from then to grow in line with total economic growth.
Borrowing sat at £150bn at the start of this parliament. It is set to fall from £97.5bn in 2013-14 to £90.2bn in 2014-15, £75.3bn in 2015-16, £39.4bn in 2016-7, £12.8bn in 2017-8 before reaching a £5.2bn surplus in 2018-9
The stock of debt as a share of GDP is set to fall from 80.4% in 2014 to 80.2% in 2015-16 before falling in every year, reaching 71.6% in 2019-20.
The sun may indeed be starting to shine. The question as to whether or not this is being felt by the majority of the British public will be answered at the ballot box on the 7th May.