LONDON (Reuters) - British finance minister Philip Hammond delivered his annual budget statement to parliament on Wednesday, raising Britain’s economic growth forecasts for this year but cutting them for subsequent years.
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Here are some of the main announcements:
The British economy is now forecast to grow at 2 percent in 2017, up from a previous forecast of 1.4 percent. In 2018 growth is seen slowing to 1.6 percent, before picking up to 1.7 percent in 2019, then 1.9 percent the following year, and back to 2 percent in 2021.
Inflation is predicted to run at 2.4 percent this year, 2.3 percent next year and 2 percent in 2019.
Public sector net borrowing is seen falling to 2.6 percent of gross domestic product this year from 3.8 percent last year. It is then forecast to be 2.9 percent in 2017 to 2018 and continue falling to 1.9 percent in 2018 to 2019. It will hit 0.7 percent in 2021-2022.
“Class 4” national insurance contributions for the self-employed, paid by those with profits of 8,060 pounds or more annually, will rise to 10 percent from 9 percent from April 2018, and see a further 1 percent increase in April 2019.
“Class 2” national insurance contributions, for those with profits of 5,965 pounds or more a year, would be abolished from April 2018.
Britain’s tax-free “personal allowance” will rise for the seventh year in a row to 11,500 pounds and the threshold at which taxpayers start paying the higher rate of tax will rise to 45,000 pounds (per year).
Hammond renewed the government’s commitment to raise the tax-free threshold to 12,500 pounds and the higher rate threshold to 50,000 pounds by the end of this parliament, due in 2020.
The government will provide a 1,000 pound discount on business rates tax for pubs with a rateable value of less than 100,000 pounds in 2017.
The tax-free dividend allowance for directors and shareholders of small private companies will fall to 2,000 pounds from 5,000 pounds from April 2018.
Hammond committed additional grant funding of 2 billion pounds to social care in England over the next three years.
Reporting by UK bureau, compiled by Elisabeth O'Leary; editing by Michael Holden