Britain's Chancellor of the Exchequer Gordon Mr Brown stuck to his confident economic forecasts and unveiled measures to woo voters and investors in a budget speech that may be his last before Prime Minister Tony Blair hands him power.
"The British economy is strong and strengthening," Mr Mr Brown declared to a packed parliament as he forecast growth accelerating to 2.75-3.25 per cent in 2007 from 2.0-2.5 per cent this year, in line with his pre-budget report in December.
Gordon Brown delivers his 2006 budget speech to Members of Parliament
But he was forced to increase his forecast for borrowing for the 2006/07 fiscal year by £2 billion to £36 billion, further limiting his options in next year's review of spending.
"I think that's the result of starting with a bigger deficit this year than planned," said Lloyds TSB economist Trevor Williams. "Once again, it is borrowing that's taking the strain and it implies to me that he may not try to find the tax increases for that."
The British economy grew by just 1.8 per cent in 2005, the weakest pace in 13 years, casting a shadow over Mr Brown's long record. Public borrowing in February was the highest for that month since Labour came to power in 1997.
But Mr Brown's tenth budget statement was as much about politics as economics.
Mr Brown pleased property investors by setting a charge for property companies to convert to tax-efficient Real Estate Investment Trusts (REITs) much lower than expected - sending shares higher - and announced measures to help families and homeowners.
He raised the threshold for stamp duty on house purchases by £5,000 to £125,000 and said the threshold for inheritance tax on estates would rise to £325,000 pounds over four years.