Budget 2009

Chancellor admits true peril of UK economy but his prediction of an optimistic rebound puts off  difficult decisions

The 2009 Budget has exposed the real state of the public finances and the downturn in the economy. The Chancellor outlined another fiscal stimulus package for this year, but significant tax rises to come, all against the backdrop of the worst economic turmoil for 60 years and an over optimistic path to recovery.

Stephen Gifford, Chief Economist at Grant Thornton, says "The Chancellor's view of 1.25% growth in 2010 is wildly optimistic and out of line with the consensus. Predicting such a quick bounce back allows him to conveniently put back sorting out the public borrowing and debt until after the next election".

This Budget has outlined seriously higher taxes in the future, with the tax burden next year predicted to fall by £5.1 billion in 2009-10 but an increase of £5.2 billion in 2011/12 and by £10.1 billion in 2012/13. Efforts to invest and grow the economy included employment support, training for unemployed young people, assistance for small businesses and green incentives.