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Osborne: Recovery to take longer


Chancellor George Osborne has admitted that the UK’s economic recovery will take longer than expected in what will come as a blow to the country’s businesses.

In his Autumn Statement, he reiterated that the Government’s efforts had put the economy on the right track, despite the independent Office for Budget Responsibility (OBR) forecasting GDP to contract again between October and December to such an extent that the economy will have shrunk by 0.1% in the whole of 2012.

The OBR also downgraded its forecasts for next year, when modest growth of 1.2% is expected to be secured, as credit conditions continue to normalise and global growth remains weaker than expected.

In a bid to give the country an additional boost, Mr Osborne announced a range of initiatives. Top of the list was the cancellation of January’s planned 3p rise in fuel duty, together with a further cut to Corporation Tax that will see it stand at just 21% from April 2014.

He also said that the Income Tax allowance will be increased to £9,440 from April 2013, although the threshold for the 40% rate will increase by just 1% in 2014/5 and 2015/6.

Meanwhile, he announced that £1 billion will be made available to UK businesses through the new business bank, when it comes into operation.