The UK budget 2012 will primarily focus on reducing national debt and deal with critical economic issues such as youth unemployment.
Highlights of UK Budget 2012:
In 2012, fiscal the total government spending of United Kingdom is supposed to be 703.4 billion pounds.
The current debt ratio between the central government of the UK and the local governments is 74:26.
It is expected that in 2013 fiscal the total expenses of the national government will amount to 722 billion pounds and 740 billion pounds in 2014.
The Office of Budget Responsibility, UK predicts that in 2012 fiscal the national economy will grow at 2.5 percent.
However, these forecasts could come down when the independent body publishes its next round of forecasts on 29th November.
In 2011 fiscal the net public debt of UK will amount to 909 billion pounds and this will go up to 1046 billion pounds in 2012.
The projected net public debt for 2013 fiscal is 1164 billion pounds and for 2014 it is 1251 billion pounds.
The government is looking to up the fuel duty by 3 pence per liter. The new rates are supposed to be effective from January 2012 onwards.
This means, that on an average, gas expenses would go up by 1.50 pounds.
UK Governmental Expenses 2012:
Following is the allocation of UK�s public expenses of �703.4 billion across different sectors in the 2012 fiscal:
UK Economy Important Statistics and Information:
The Bank of England has estimated that in 2012 fiscal UK s inflation rate will be lesser than 2 percent. This means that it might have to inject additional electronic money into the system.
Economic growth is expected to remain stagnant till the middle of 2012 fiscal for the year this would amount to 1 percent only. The Bank of England had initially forecast that economic growth could reach 2 percent in 2012.
The inflation rate is expected to stay below 2 percent till 2014.
Bank of England may be forced to raise its base rate from 0.5%, which is the lowest rate so far. The chances of low inflation and economic growth can take away a lot of pressure from the Monetary Policy Committee of the Bank of England.
The Bank of England has predicted that in 2013 the national economy will grow by at least 2.5 percent this rate would go up to 3 percent in 2014 fiscal. Several economists feel that these projections are unrealistic. They are stating that the period of extended low economic growth will mean that base rates will remain below 1 percent for the next couple of years and lesser than 3 percent for the coming 10 years.
The chief economist of Investec Securities, Phil Shaw, opines that base rates would not exceed 0.5 percent till 2013. Vicky Redwood, the chief UK economist for Capital Economics, has suggested that UK needs to relax its economic policies so that some growth can be achieved.
In February 75 billion are expected to be provided by the Bank of England for quantitative easing. It would buy additional government debt worth 75 billion from the banks and corporations across UK. This would take the total sum spent for quantitative easing to 275 billion.
The economic problems in Eurozone and the overall decrease in global economic demand have been blamed for the present condition of the UK. The banks in UK have been performing better than elsewhere in Europe but have still faced problems because of the global financial condition.
Several consumer and business surveys have revealed that families and business houses are limiting their expenditure as they are worried about the present condition of UK economy.
Several politicians are asking the national government not to increase petrol duties, saying that this can be a perfect opportunity to prove that they care as much for the middle class section of the society.