LONDON, March 22: British finance minister Gordon Brown stood by his forecast of 2.0-2.5 per cent economic growth this year in his tenth and possibly last annual budget on Wednesday. Amid speculation that he could soon succeed Tony Blair as prime minister, Brown used his tax and spending statement to announce investments aimed at cutting global pollution and improving education at home.

Brown, Britain’s longest-serving chancellor of the exchequer, also maintained a previous forecast that British gross domestic product would grow by 2.75-3.25 per cent during 2007 and 2008.

“The British economy is strong and strengthening,” Brown said in a speech to parliament that lasted about one hour. His optimism came despite economic growth of 1.8 per cent in 2005 — the slowest annual pace since 1992.

Brown had forecast Wednesday that public sector net borrowing in 2005-2006 would be 37.0 billion pounds (53.5 billion euros, 64.6 billion dollars), unchanged from his estimate in the pre-budget report last December.

For 2006-2007, Brown forecast net borrowing of 36.0 billion pounds, 2.0 billion higher than his forecast in December.

On education, the chancellor said: “With China and India turning out not just four million graduates a year to Britain’s 400,000, but also more computer scientists, more engineers, and more technicians, we can no longer afford to write off the talent or waste the potential of any young person.”

The chancellor’s latest budget “is largely a ‘steady as she goes’ affair”, said Howard Archer, chief Britain economist at Global Insight.

“Brown talked up the extended strength and stability of the economy under his stewardship and also sought to enhance his credentials as the next Prime Minister through outlining a number of initiatives targeted at developing a vibrant, dynamic, fairer and greener economy over the longer term.”

In his speech, Brown stressed that inflation would remain around the government’s target of 2.0 per cent over the coming 10 years, helped by public sector wage increases remaining relatively contained at 2.25 per cent this year.

A year ago some said that the doubling of oil prices would push our inflation far beyond target and that a recession was required to slow the increase in house prices, Brown said.

Instead I can confirm to the house, as stated in the pre-budget report, that growth will be 2.0-2.5 per cent, followed in 2007 and 2008 of growth between 2.75-3.25 per cent.

Before the budget statement, Blair had told parliament on Wednesday that he was in no rush to give up office.

I shall be here for the time that is necessary to carry through the programme upon which we were elected, Blair told Cameron after being asked when he would step down.—AFP