Budget analysis – Economy

Speed Read: The Chancellor delivered a cautious Budget with no significant net changes to the fiscal stance and only minor revisions to economic growth. Modest revenue windfalls were used prudently to reduce borrowing, although this remained at historically very high levels. As a result, the UK finds itself in broadly the same position as it was following the December Pre-Budget Report: it is reliant on a brisk economic recovery to reduce the Government deficit to sustainable levels in the medium term with the prospect of further tax rises and/or spending cuts if growth is slower than the Treasury assumes. Additional fiscal tightening could need to be around £30 billion per annum by 2015/16, over and above existing plans for tax rises and spending cuts.