Budget 2009: Summary of key measures

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  • The UK economy is forecasted to shrink by 3.5% in 2009. The growth forecast for 2010 is 1.25%, and from 2011 onwards its 3.5% a year.

  • Inflation will reach 1% by the end of the year. The retail price index will drop by -3.5%.

  • Public sector net borrowing is expected to hit 175bn this year (12.4% of GDP), and then 173bn, 140bn, 118bn and 97bn in the years that follow.

  • UK net debt stands at 59%, rising to 68% next year and increasing again to 79% by 2013/14

  • Income tax will not go up this year for most, however those earning more than 150,000 will see an increase from 45% to 50% from April 2010.

  • Fuel duty will be upped by 2% from September, and 1% above indexation every year for the next four years.

  • Alcohol and tobacco duties will be increased by 2% from 6pm today.

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By Anonymous
24th Apr 2009 15:16

debt as % of GDP
Your stats are of course only right if Ali's predictions about GDP (and in particular growth by 2010) are correct. Otherwise it's much much wose. We are widely reckoned to top out (hopefully) at £1 trillion of debt. Any forecasts made by HMT and HMG assume that we will quite quickly return to 2007/08 (pre "downturn") levels of activity which I must say is at best a silly assumption, and at worst criminal mismanagement.

Ken Clarke quoted the interest payments (on the Andrew Marr BBC 1 Sunday monring) at the same amount as we spend on education. And that's with "university placxes for all" policies.

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By Anonymous
24th Apr 2009 09:57

Is it just me?
UK net debt stands at 59%, rising to 68% next year and increasing again to 79% by 2013/14...

We will be in hock for up to 80% of what we produce?
That is plainly just stupid, isn't it?

Are we actually going to be able to afford to pay the interest back on the debt...

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23rd Apr 2009 13:09

IMF and bailouts
I have just been listening to a very highly respected economist talk about the current economic scenario.

One thing that REALLY scared me was this : if we go to the IMF we would need about $500 bn (dollars not pounds) but the IMF only has lending capability (for the whole world in total) of around $200 - $300 billion. AND we would never meet the lending criteria.

And I thought tax was scary!

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23rd Apr 2009 11:32

A Fairy Story (But more Alice in Wonderland)
... with the emphasis on 'wonder.' I still forecast a complete economic collapse of the UK economic sometime during 2009 that will result in a bail-out (with austerity conditions attached) by the IMF.

The UK is going to be forced, by hard economic circumstances, to drop its pretence at running a pseudo empire with a world-wide military presence and all the other trappings of a supposed world power. The UK is improverish, bankrupt, down and out - full-stop. Yes, hard words for hard time; but someone, somewhere, needs to spell it out.

Brown's boom has turned into Brown's bust. This Budget is crafted to hold onto as many Labour Parliamentary seats as possible when the electoral cull devastates New Labour next Spring or early summer 2010. We won't see a Labour government again for twenty plus years - so save any newspaper cuttings which mention this present government, they'll be collectors' items!

The wealth of a country comes from the enterprise and energy of its people, not by borrowing money on the international money markets or by juggling the tax system (or by getting one group of taxpayers to pay for the jobs and benefits of another group).

The UK is a small country with a relatively small population and small economy in comparison with big countries with big populations and big economies - the UK has had its day and needs to live within its (impoverished and much reduced) means.

It should wake up to the fact that its workforce must get off its collective backside and work hard for a living instead of living off the sweat and money of those in other countries. Does anyone else agree with this?

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By lizzyk
23rd Apr 2009 00:51

This is a Fairy Story (A Grimm one)
I was reading through the main point of the Budget and I was suddenly transported into an unreal world, there is just no way those growth figures are ever going to happen from 2010 on as the Chancellor states. Is he trying to kid us or just fool himself?

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