British finance minister delivers budget updateWednesday 05 December 2012 17.44
Britain’s Chancellor George Osborne has insisted the country’s economy is “taking time” but is recovering.
In his Autumn Statement, he admitted he would miss his target to cut debt and said the economy was still facing major problems, but he claimed the country was "on the right track - and turning back now would be a disaster".
Mr Osborne acknowledged that previous growth predictions were wrong, but he pledged to continue efforts to drive down the deficit.
Quoting the latest Office for Budget Responsibility growth forecast, Mr Osborne said the economy was now expected to shrink by 0.1% this year compared with a previous prediction of 0.8% growth.
Setting out spending plans for 2015-16 and a framework into 2017-18, he said deficit reduction measures would be achieved fairly with further savings from bureaucracy, from benefit bills and the better-off.
He hailed a reduction in borrowing, saying it was forecast to fall from £108 billion this year to £99bn next year, £88bn the year after, then £73bn in 2015-16 and £49bn and £31bn in the two years after that.
Mr Osborne admitted he was going to miss his target that debt should start falling as a proportion of GDP by 2015/16 - the year of the country’s next general election.
Instead he said it would take another year.
He said the OBR's central forecast is that net debt will be 74.7% this year, then 76.8% next year, 79% in 2014-15 and 79.9% in 2015-16. It will then fall to 79.2% in 2016-17 and 77.3% in 2017-18.
He told MPs: "Yes, the deficit is still far too high for comfort. We cannot relax our efforts to make our economy safe.
"But Britain is heading in the right direction. The road is hard but we're making progress."