Alistair Darling has made economic stability the priority of his first Budget as world markets grapple with the global credit crunch. The planned 2p increase in fuel duty will be delayed until October, but there are increases in duty on tobacco and alcohol products.
The economy
According to the chancellor, Britain is uniquely positioned in the global economy but is affected by turbulence in other markets. However, we enjoy the most stable economy in the G7 and have low unemployment. The UK growth forecast has been reduced from 2.75% to 2.25%. But despite the slowdown, the UK economy has grown 3% faster than the US and Japan.
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Inflation is set to rise in the short term, but is forecast to return to 2% target in 2009. Borrowing next year will rise to £43 billion, but will not breach 40% of GDP.
Fuel duty
Mr Darling announced: "For environmental reasons we will increase fuel duty by 0.5 pence per litre in real terms from 2010." But he said he would postpone the 2p fuel duty rise scheduled for April until October "to support the economy now and help business and families".
Public taxes and spending
Public spending will increse in real terms by 2.2% each year over the next three years.
Defence
An extra £2 billion has been put aside for spending on for frontline troops, £900 million of which will be used for equipment.
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