UK Chancellor George Osborne on Wednesday delivered his fifth budget, which revealed a number of tax and spending cuts to boost the economy.
He warned that while Britain was growing at a faster rate than any another advanced economy in the world the recovery was far from assured.
"This country still borrows too much, we still don't invest enough, export enough or save enough," he said.
Osborne revealed the Office for Budget Responsibility had lifted its forecasts for economic growth.
The OBR revealed the UK will expand by 2.7% this year compared to its earlier estimate of 2.4%. The UK will grow by 2.3% next year, it said.
The 2015 estimate is one tenth of a percentage point less than had been expected by the consensus.
Osborne added that the OBR sees the Budget deficit falling more than expected this year at 6.6%. He said by 2018-19 annual Budget deficit will disappear, with a move into a small surplus.
However, he noted that the deficit in Britain was "still one of the highest in Europe today so we will take further action to bring it down".
Such actions include boosting job creation, investing in exporters, slashing government spending and cutting taxes to lift consumer expenditure.
In an effort to support "hard working people", Osborne said the UK tax-free personal income threshold will be raised to in April 2014 from £9,440 to £10,000 and by a further £500 in 2015.
He also confirmed that the higher rate threshold will rise from £41,450 to £41,865 next month, and then by a further 1% to £42,285 next year. Osborne said even those making up to £100,000 annually would benefit from tax cuts.
"We are making sure hard working people keep more of what they earn and save more," he said.
To help people save, he said cash and stock bank ISAs will be merged to create a new ISA. The move will allow people to save up to £15,000 a year on a tax-free basis from July 1st, Osborne said.
The tax cuts come ahead of the general election 2015.
He noted that there had been a faster-than-expected pick-up in the labour market, with a record number of women in jobs.
Acting as a backdrop, the Office for National Statistics today revealed separately that the unemployment rate remained unchanged in the three months to January at 7.2%. The consensus estimate had been for a reading of 7.1%.
Jobless claims count fell by 34,600 in February, beating forecasts for a 25,000 decrease, the ONS said. They fell 33,900 in January.
Help to Buy
Osborne said extending the Help to Buy programme from 2016 until 2020 will support more than 200,000 new homes for families.
Help to Buy has been credited by UK housebuilders for boosting demand in the sector since it was first launched in spring 2013. However, some fear it could lead to a housing bubble as demand has been outstripping supply.
To address this issue, Osborne said the government would tighten the noose on people owning UK homes via companies.
"We are expanding the new tax we introduced to stop people avoiding stamp duty by owning homes through a company," he said.
"From midnight tonight anyone purchasing residential property worth over half a million pounds through a corporate envelope will be required to pay 15% stamp duty."
Additional measures announced in the Budget included:
- A scheme to boost exports by doubling the amount of finance available to £3bn.
- A five-year cap on structural welfare spending from 2015, starting at £119bn. and rising in line with inflation. It excludes pensions and Job Seekers Allowance
- Freezing duty on cider, lowering the duty on beer by 1p per pint.