British budget prepares for second Labour term

British finance chief Mr Gordon Brown unveils a budget this week that promises billions of pounds (sterling) in tax give-aways…

British finance chief Mr Gordon Brown unveils a budget this week that promises billions of pounds (sterling) in tax give-aways in a timely reminder of Labour's economic success just weeks before an expected election.

Mr Brown, nicknamed the "iron chancellor" for his vice-like grip on the public purse strings, is sitting on a record surplus, and is widely expected to use up to £5 billion sterling (euro eight billion) of his cash pile to woo key electoral constituencies.

But he will also take the opportunity of Wednesday's budget to remind the country of how the economy has fared under his four-year stewardship, as Labour seeks to play a trump card to secure re-election for the first time in its history.

Under Mr Brown, British inflation and unemployment have tumbled to 25-year low points, while growth has remained steady. Mr Brown also gave the Bank of England independence over setting interest rates, effectively putting monetary policy on autopilot.

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The combined effect has been a formidable budget surplus over the last 18 months. In the 10 months to January, the public sector surplus soared to a record £40 billion.

AFP