Brown says growth will accelerate next year

March 22 | Updated: Mar 23 2006, 05:30am hrs
UK Chancellor of the Exchequer Gordon Brown predicted today that economic growth will accelerate this year and next after the nation suffered its slowest expansion since 1992 last year.

Britains economy will grow by as much as 2.5% in 2006 and 3.25 in 2007 and 2008, Brown forecast in his annual budget statement to Parliament. The figures, unchanged from his estimate in December, exceed the median forecast of 22 economists surveyed by Bloomberg News for growth of 2.5 percent next year.

The British economy is strong and strengthening, Brown said at the beginning of his speech to the lawmakers in London. Our economic framework has proved resilient, robust and prudent.

Brown, who has presided over 35 quarters of economic expansion since the Labour Party took office in 1997, is counting on growth to push up tax revenue and keep a lid on borrowing as he prepares to take over from Prime Minister Tony Blair.He is still being pretty optimistic for 2007, Danny Gabay, director of Financial Consulting and a former economist at the Bank of England, said before the announcement.

On the deficit, Brown said the Treasury would borrow 1 billion pounds ($1.8 billion) more by fiscal 2010 than he predicted in December. Public sector net borrowing will fall to 30 billion pounds in the year to April 2008 from 36 billion pounds in fiscal 2007 and 37 billion pounds in the current year.

In all, the taxation and spending measures Brown announced today will raise 740 million pounds for the Treasury during the next three fiscal years, the Treasury estimates.