The
Government is "cautiously optimistic" about the UK’s chances of
avoiding a recession, claimed Chancellor Gordon Brown in his pre-Budget report
today.
Brown
believes that the British economy would weather the world economic slowdown better
than most economists had forecast.
He
predicted that the economic growth this year would be 2.25 per cent compared
with his forecast in his Budget last March of 2.25 to 2.75 per cent.
At
the same time, however, he acknowledged that there were "real risks"
both for Britain and the world economy following the "traumatic"
events of 11 September.
MPs
heard that the task of his pre-Budget report was to set out how the UK would
rise to the challenges of the world economic situation, with the US officially
in recession and forecasters predicting a global growth downturn.
"No
one country can insulate itself from such a synchronised slowdown," he
admitted.
He
pointed to the Bank of England’s pre-emptive action during this slowdown, with
seven interest rate cuts this year.
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The
Government will introduce new tax credits for research and development by large
companies. Brown plans four tax cuts for enterprise, including reductions in
capital gains tax for business.
The
pre-Budget report also included an extra £1bn spending on the NHS next year.
This brings the total rise to £6bn, which is 9.6 per cent in cash terms and 7
per cent in real terms.
