Pre-Budget Report key points unveiled
After today’s Pre-Budget Report was delivered by Chancellor Alistair Darling, the FTSE 100 soared nearly 10% (the biggest ever one-day gain), as plans to boost the UK’s economy were unveiled.
The measures announced by the Chancellor are hoped to prevent the economy from a ‘very deep recession’. However, the measures come at a high price as borrowing is set to rise significantly over the next five years.
The key points are as follows:-
VAT is to be cut from 17.5% to 15% from next Monday, December 1, for 13 months.
High earners will face more tax. Those earning over £150,000 a year will rise to 45p in the pound, this group of people account for approximately 2% of workers.
All national insurance payments are set to rise 0.5% from April 2011.
Meanwhile, 22 million basic rate taxpayers are set to benefit as the temporary tax of £120 a year, which was introduced in May, is to become a permanent feature.
Furthermore, child benefit is to increase in January, from £18.80 per week to £20 per week.
State pensions are to rise in line with the highest rate of inflation this year, this equates to an increase of £4.55 a week for a single person.
Finally, for those struggling with mortgage payments, the period of grace before lenders repossess homes is to increase to three months.
Commenting on the measures, Mr Darling said if no action is taken, we will have a deeper and longer recession that would cost the country more in the long-term,
In these extraordinary circumstances allowing borrowing to rise is the right choice for the country, said Mr Darling.