Published December 04, 2012
LONDON – Britain's Treasury chief, George Osborne, is expected to unveil plans to kick-start the U.K.'s moribund economy when he presents updated budget policies to lawmakers on Wednesday.
As well as outlining the state of the coalition government's finances, Osborne is expected to announce an expansion of gas-fired power plants and a revised program to encourage private investment in public projects, according to news reports based on government briefings.
The new initiatives, Prime Minister David Cameron said on Tuesday, "will make our country work better."
The so-called Autumn Statement is one of two big policy announcements Osborne makes during the year — the other being the annual budget in the spring, which tends to focus on taxation.
Analysts on Wednesday will be paying particular attention to what Osborne has to say about his target to have public sector debt as a percentage of the U.K. economy start dropping by 2015-2016.
The Treasury minister originally set that goal in June 2010, but he was working on economic forecasts that have proved to be far off the mark.
At that time, the independent Office for Budget Responsibility predicted that the U.K. economy would be growing by nearly 3 percent a year by now. Instead, it sank into a second recession in the fourth quarter of 2011, and didn't return to growth until the third quarter of this year. Analysts expect the economy to shrink again in the last three months of the year.
Those earlier estimates also expected Britain's biggest export market — the crisis-hit group of 17 European Union countries that use the euro — to be growing by about 2 percent this year. The latest European Commission forecast is for 0.1 percent this year.
Osborne's colleagues in government are also hoping that the statement won't be a repeat of the spring Budget. Then, Osborne presented a series of unpopular measures that not only gave a tax cut to the wealthiest taxpayers, but eventually led to embarrassing reversals on his plans to raise taxes on hot meat pies, reduce tax relief for charitable donations, and to go ahead with a hike in the tax on auto fuels.