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Budget 2010 - Maintaining a stable economy


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Issued 24 march 2010

The Government’s long-term economic goal is to secure and maintain economic stability, in order to achieve its objective of a fair society where there is security and opportunity for all.

In 2009 the global economy contracted for the first time in 60 years, following a worldwide financial crisis. All countries have been affected and the impact has been felt by households and businesses across the UK.

Government support for the economy along with action from the Bank of England, such as interest rate cuts, has helped ensure that the impact of the recession on employment and repossessions has been less severe than independent experts had forecast. The latest economic data shows that the UK economy returned to growth at the end of last year. 

In recent months many risks have reduced, but the global economy remains fragile. While there are signs that the economy and financial markets have stabilised, all economic forecasts remain subject to a high degree of uncertainty. The Budget sets out the Treasury’s forecast that that UK economy will grow by 1¼ per cent this year, and 3¼ per cent next year.

Budget 2010 announces further targeted support for households and businesses to secure the UK’s economic recovery while global prospects remain uncertain, and puts in place a platform for sustainable growth in the economy. 

Sustainable public finances are an essential ingredient of strong and sustainable economic growth.  Borrowing has been allowed to rise as the Government has supported the economy through the downturn but in the medium term it must live within its means.  Budget 2010 sets out further details about the Government’s plans to halve the level of public borrowing as a proportion of the economy over four years.

The chart below shows UK Gross Domestic Product (GDP), which is a measure of the country’s total output of goods and services. When the GDP figure is positive the economy is growing, whereas a negative figure means the economy is contracting.

This line graph shows Gross Domestic Product (GDP) from 1950 until 2015 (forecasted growth), expressed as percentage change on the previous year. It shows year-on-year growth since 1993, until a five per cent contraction in 2008-09. GDP is forecast to rise over the next five years at a rate of between one and four per cent.

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Article Published/Sorted/Amended on Scopulus 2010-03-25 10:51:23 in Economic Articles

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