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Osborne promises 'Budget for growth'

Tax break: 25m can now fill up their cars. Once. Halfway

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Chancellor George Osborne is promising this afternoon's Budget will be a strategy for growth when set against big cuts in public spending, which seem likely to push the UK in the opposite direction.

An increase in personal tax allowance, the amount you can earn without paying tax, is widely expected. The Beeb reckons this will give 25 million UK citizens a whopping £45 a year – enough for a small cup of petrol.

Allowances are going up by about £600, but don't spend it yet – the change comes into force in April next year.

Osborne's job has been made harder by inflation and growth numbers released yesterday. The fear is that inflation will force the Bank of England to increase interest rates, which will reduce the UK's limited growth and result in "stagflation".

The Consumer Price Index, the government's favoured measure, stands at 4.4 per cent, up from 4 per cent in January: this compares to an EU average of 2.8 per cent.

CPI was pushed down by booze and ciggy prices, which were down 1.1 per cent. It was pushed up by costs of domestic heating, clothes and shoes.

The Retail Price Index is up as well – to 5.5 per cent, compared to 5.1 per cent in January.

First-time buyers are also getting help, according to widely leaked plans. Some 10,000 people will get a 20 per cent low-cost loan for new-build homes.

Osborne is also expected to do something to alleviate fuel prices – possibly by delaying the planned rise in fuel duty due next month.

The Budget speech will begin at 12.30; we'll have more coverage shortly after that. ®

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