We detail below some of the salient points from the Budget and our comments.
Economic Growth - Gordon Brown said the forecast this year is unchanged at 3%, and expected to be 3 to 3.5% next year. comment - this is between 0.5% and 1% above Trend Growth.
Inflation - Gordon Brown said he expects 1.75% this year and 2% next year - with 2% in 2005. comment - with economic growth well above trend - we expect inflation to be nearer 2.5% next year.
Borrowing - Gordon Brown said he expects borrowing to rise in 2003/04 to £37bn and for subsequent years he predicts £33bn, £31bn and £27bn. comment - Mr Brown has got his sums wrong before in this area - we will take him at face value as the figures have been revised significantly upwards. It is a gamble though - if the sums are wrong - the tax increases will be harsh.