Comment & Analysis

Thursday April 16, 06:26 PM
UPDATE 1-UK budget will help families, business-PM spokesman

LONDON, April 16 (Reuters) - Policies aimed at helping families and businesses during the recession will be the priority of next week's budget, finance minister Alistair Darling told Cabinet ministers on Thursday.

'The chancellor (Darling) made clear we would not make the mistakes of the previous recession and allow a short-term increase in unemployment to become permanent,' a spokesman for Prime Minister Gordon Brown's office said in a statement.

The budget, to be delivered by Darling on April 22, is shaping up to be one of the most gloomy in decades given the economic slump and soaring public debt.

British unemployment figures for March are due to be released only hours before Darling stands up in parliament to make his address, one of the big political set-piece events of the year.

Alongside that, borrowing figures for the 2008/09 fiscal year are expected to show the worst outturn since World War Two.

Darling will also be forced to take an axe to his economic forecasts next week and admit the economy looks set for its deepest downturn for more than six decades.

In his pre-Budget update last November, Darling forecast the economy would contract by around 1 percent this year, a far cry from the 2 percent growth he initially envisaged. Despite a raft of stimulus measures, even this looks unrealistic and Darling is likely to admit the downturn will be three times sharper.

Darling has limited room to move on any stimulus to boost the economy given the pace at which the economy has shrunk since November.

(Reporting by Frank Prenesti; Editing by Victoria Main) Keywords: BRITAIN BUDGET/CABINET (London newsdesk +44 207 542 7947)

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