Budget 2009: Economy turnaround by 2010

A daring and contentious budget speech by UK Chancellor of the Exchequer Alistair Darling was punctuated with an interesting promise: the UK economy is set to grow at the start of next year.

Speaking in the Commons, Darling said that GDP will grow 1.25 per cent by 2010 and climb at an annual rate of 3.5 per cent thereafter the following year, offering a glimpse of escape from a global recession that has deeply penetrated the UK economy.

However, the economy is forecast to drop 3.5 per cent this year.

Analysts are already labelling the 2010 and 2011 growth forecasts as optimistic. Leader of the opposition, David Cameron, said that consumer demand would need to be at ‘pre-boom’ levels by 2011 in order for Darling’s promise to be met.

Darling’s Budget speech was spread with a number of statistics which in their own way identified the extent of the current economic crisis the UK is in. Unemployement climbed 137,000, he said, while it had grown another 74,000 in march to reach a total rate of 4.5 percent.

He reminded the House that the Bank of England interest rate is at an all-time low, and stated that the world economy has contracted for the first time since the Second World War.