UK Budget will be on Weds, March 21

UK Budget will be on Weds, March 21

	Published : Thu, 22 Feb 2007 11:14 By : Agencies Print this Story

LONDON (AFX) - Chancellor of the Exchequer Gordon Brown will be delivering his eleventh and likely last budget on Wednesday, March 21, the Treasury said today.

Brown, who is thought to be a shoe-in to replace Tony Blair as Prime Minister when he quits some time before the Labour Party Conference in September, will use the speech to cap a decade at the helm of the UK's economy and pave the way for what he is likely to do when he moves to Number 10.

The Chancellor will be able to show that the UK economy has enjoyed an unprecedented period of unbroken growth over the last ten years and is currently growing above its long-run average despite higher borrowing costs and sky-high energy costs.

Analysts expect Brown to maintain his most recent GDP forecast in last December's pre-budget. Brown forecast that the UK economy will grow by between 2.75-3.25 pct this year, above the 2.7 pct recorded in 2006.

The picture on the public finances front is a little bit more tricky though.

Brown revised up his forecasts for 2006/7 public sector net borrowing to 36.8 bln stg from the 36 bln stg forecast made in last March's Budget.

With ten months of the fiscal year completed, net borrowing stands at 27.6 bln stg, down on the previous fiscal year's 31.3 bln.

However, analysts noted that February and March are major months on the fiscal calendar.

If Brown meets his projections, analysts believe he will have a good chance of meeting his 'golden rule', of balancing the budget, excluding investment across the economic cycle.

Brown uses the current budget when assessing the 'golden rule'.

On a cumulative basis, the current budget deficit in the first ten months of the year has improved to 8.1 bln stg from 14.5 bln last year.

In the pre-budget report, Brown forecast a current budget deficit for the fiscal year of 7.9 bln stg.

pan.pylas@thomson.com

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