Pre-Budget 2003: Brown gambles and wins
The chancellor was labelled a successful gambler by KPMG today, following an upturn in economic growth prospects revealed in the pre-Budget report.
Link: Pre-Budget 2003 special
But the firm warned there were still uncertainties that could throw him off course.
KPMG economist Leslie Gunde said: ‘Above trend growth targets for 2004 and 2005 – unchanged from last year’s Budget – remain ambitious, with the bank’s latest inflation report suggesting that the scope for such above trend growth is limited.
‘And the chancellor’s emphasis on a tight spending round recognises the growing problem of public sector inflation, currently running at 7.7%.’
Grund said that small business had won out ahead of big business, with tax credits for research and development and corporation tax relief both targeted at smaller companies.
‘There were no Christmas giveaways from Gordon Brown – except perhaps for small businesses. Bigger businesses have little to take away from it and many key issues such as corporation tax remain unresolved.
‘The chancellor is looking forward to a Happy New Year if the global economy continues to recover at the same rate and business confidence continues to grow – this looks a fair bet at the present time, but any unexpected economic shocks could still throw things out of kilter.’