British economy set to slow down, says chancellor

March 12th, 2008 - 10:49 pm ICT by admin  

A file-photo of Gordon Brown
By Dipankar De Sarkar
London, March 12 (IANS) British economy will grow at a slower than expected rate this year as a result of the US financial crisis that has now spread across the world, Britain’s finance minister said while presenting the annual budget to parliament Wednesday. Even the fastest-growing economies of the world - Brazil, China and India - were expected to slow down this year, Chancellor of the Exchequer Alistair Darling told MPs.

Although slower than projected, the British economy will grow at a faster rate than the economies of the US, Japan and the Euro zone, he said.

“Britain is better placed than other economies to withstand a slowdown,” Darling said, adding that Britain had grown continuously for a decade - its longest period of sustained growth in recent times.

The economy is expected to grow at 1.75 percent to 2.25 percent in 2008 - well below the 2.5 percent to 3 percent predicted in last year’s budget by the man Darling succeeded, current Prime Minister Gordon Brown. The economy grew at 3 percent last year.

Darling said while economic globalisation had benefited all economies, Britain’s “openness makes it uniquely placed to succeed”.

However, analysts said the difficulties that lie ahead for British economy became clear from the government’s borrowing projections.

Borrowing is expected to rise from 38 billion pounds this year to 43 billion pounds next year - 2.9 percent of national income - whereas the assumption in the pre-budget report was that borrowing will fall to 36 billion pounds.

In what was described as Britain’s “greenest ever” budget, Darling also said the government will seek advice from its Climate Change Committee on whether to increase the target for reducing carbon emissions by 80 percent by 2050, instead of the currently agreed 60 percent.

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