Tuesday October 9, 05:42 PM
UK Pre Budget Report: At-a-glance guide to main points
LONDON (Thomson Financial) - Following is an at-a-glance guide to the main points of UK Chancellor of the Exchequer Alistair Darling's pre-budget report speech
ECONOMY
-UK 2007 GDP growth forecast at 3.0 pct, in line with Budget forecast of 2.75-3.25 pct
-UK 2008 GDP growth forecast cut to 2.0-2.5 pct from 2.50-3.0 pct
-UK GDP growth in 2009, 2010 forecast at 2.5-3.0 pct, unchanged
-Annual CPI inflation seen around 2.0 pct target rate over next 2 years
-Full impact of financial market turbulence 'unclear', but govt 'cautious'
PUBLIC FINANCES
-Govt to meet 'golden rule' of balancing the budget excluding investment across the economic cycle with an average current budget surplus as a percentage of GDP over the current cycle
-Current budget balance seen -8.3 bln stg in 2007/8, revised from Budget forecast of -4.3 bln, falling to -4 bln stg in 2008/9, moving back into surplus in 2009/10
-Net debt seen 38.2 pct of GDP in 2007/8, remaining just below 39 pct up to 2012 and enabling govt to meet sustainable investment rule requiring net debt to be kept below 40 pct of GDP
-UK public sector net borrowing seen falling to 33.7 bln stg in 2007/8, 30 bln stg in 2008/9, 28 bln stg in 2009/10
SPENDING REVIEW
-Government spending to rise to 397 bln stg in 2010 from 345 bln in 2007; rate of spending growth to ease to just below 2 pct per year from just over 4 pct currently
-Health budget to rise 4 pct per year to 110 bln stg in 2010 from 90 bln now
-Education budget to rise to 74 bln stg in 2010, taking education spending to 5.6 pct share of national income
-Single budget to counter terrorism, which will rise by 1 bln stg
-Transport investment to double to 14.5 bln stg by 2010
-Department of the Environment, Food and Rural Affairs budget to rise to 4 bln stg in 3 yrs to deal with climate change
-Overseas aid budget to rise to 9 bln stg by 2010
TAXES
-Capital gains tax set at flat rate of 18 pct
-To close capital gains tax loopholes
-Capital gains tax taper relief withdrawn
-Rejection of flat tax rate for non-domiciles, consultation to be launched
-May introduce tax on non-domiciles after 7 years, higher rate after 10 years
-Alternative non-domicile measures could raise 650 mln stg
-Tax-free allowance for couples' estates lifted to 600,000 stg from 300,000
GREEN
-Plans environmental fund with 1.2 bln stg budget over 3 years
-To levy tax on flights, not passengers
-Plans Europe-wide VAT rate of 5 pct on energy efficient products
MISCELLANEOUS
-To build extra 3 mln new homes through 2020
-Single budget to counter terrorism to rise by 1 bln stg
-Investment in transport to double to 14.5 bln stg by 2010
-Overseas aid to rise to 8 bln stg by 2010
DMO
-Gilt remit for 2007/8 maintained at 58.4 bln stg, same as in March announcement
-Longer-dated conventional gilts 23.4 bln over 11 auctions
-Index-linked issues at 15.0 bln stg over 15 auctions
-Medium- and short-dated gilts each at 10.0 bln stg over 4 auctions
-Treasury bill buybacks of 0.1 bln stg, down from sales of 1.5 bln announced in April
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