The UK economy will start to come out of recession during the last three months of the year, Chancellor Alistair Darling has predicted during the Pre-Budget report today. Speaking to MPs he said the economy will shrink by 4.75% this year but he expected it to grow, as he had forecast in April’s Budget, by 1 to 1.5% in 2010. He said unemployment in the UK is likely to keep rising but confirmed getting people back to work would remain the top priority for the government. Darling added from January, no-one under 24 will need to be unemployed for longer than six months before being guaranteed work or training. He admitted public borrowing for 2009 would hit £178 billion and said VAT would revert to 17.5% on January 1 – up from the current 15%. National Insurance will rise by a further 0.5% from April 2011, but anyone who earns £20,000 or less would be exempt from the increase. He deferred a 1p rise in corporation tax in the hope of helping small businesses. He has also put aside a further £500m of loans for small scheme. Yesterday, the Board of Airline Representatives in the UK (BAR UK) chief executive Mike Carrivick revealed he had written to Darling, urging him to rethink the rise in Air Passenger Duty (APD). Carrivick said: “APD will hit the inbound market as much as the outbound market and we have huge concerns about that. “People are also beginning to realise funds raised through the tax go into a general fund and it does have an adverse effect as to whether people decided to offset their emissions.” Alistair Darling delivered his last Budget in April 2009. What do you think of the PBR? Let us know on travelhubWhat happened last time?
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