Britain's chancellor lowers economic growth forecasts

14:38, March 24, 2011      

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British Chancellor of the Exchequer George Osborne said Wednesday Britain's economic growth would be slower than previously expected this year.

The Office for Budget Responsibility had cut its growth forecast for gross domestic product (GDP) growth for 2011 to 1.7 percent from the 2.1 percent it predicted last November, Osborne said.

Higher commodity prices and the surprise contraction in the economy at the end of last year had been a drag on Britain's economy, he said.

Inflation in the country was expected to rise to between 4 percent and 5 percent this year from 3 percent last year, he said.

The chancellor also confirmed a higher personal tax allowance meant 1.1 million lower paid people were no longer liable to pay income tax.

He revealed government borrowing would be 146 billion pounds (236.5 billion U.S. dollars) this year, slightly lower than the government's target of 148.5 billion pounds (240.6 billion dollars).

The official pledged to bring down debt by one percentage of GDP by 2015.

The Office for National Statistics said the public sector's borrowing in Britain last month was 11.8 billion pounds (19.1 billion dollars), much higher than the 6.9 billion pounds (11.2 billion dollars) forecast by economists.

The public sector's net borrowing now stands at 123.5 billion pounds (200 billion dollars) for the financial year so far.

Britain's recovery faltered late last year, with its GDP shrinking by 0.6 percent in the fourth quarter.

Source: Xinhua
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