Autumn Statement 2012: At a glance
Chancellor George Osborne delivered his Autumn Statement on Wednesday. Read our summary of the key announcements.
- GDP will shrink by 0.1% in the current year, down from March's prediction of 0.8%.
- The economy is expected to grow by 1.2% next year, 2% in 2014 and 2.3% in 2015.
- The economy has done better than expected in job creation, with unemployment expected to peak at 8%.
- Net debt will not fall as a percentage of GDP by 2015/16, with the Chancellor extending the target by a year.
- The deficit is expected to fall from 7.9% to 6.9% of GDP this year.
- Borrowing is unexpectedly predicted to fall this year to £108 billion.
- The 3p rise in fuel duty planned for January will be cancelled, rather than postponed as expected.
- Annual infrastructure investment is now £33 billion.
- An extra £1 billion will be spent to expand and build 100 new free schools and academies has been laid aside.
- £1 billion will be spent on roads, including upgrading the M25.
- There will be plans laid out to extend HS2 to the North East.
- 120,000 new homes will be built and there will be greater investment into flood defences.
- £600 million will be invested in scientific research.
- Ultra-fast broadband will be expanded to 12 cities.
- The main rate of corporation tax will be cut by a further 1% to 21%.
- The bank levy rate will be increased to 0.13%
- The basic income tax threshold will rise by a further £235 on top of the planned increase to £9,440.
- The threshold for 40% rate of income tax to rise by 1% in 2014 and 2015, from £41,450 to £41,865 and then £42,285.
- The government will consult on tax cuts for shale gas exploration.
- Small business rate relief extended by one year to April 2014.
- There will be no new tax on property.
- £5 billion will be retrieved over the next six years from undisclosed bank accounts.
- The government will spend £77 million more to ensure taxes are paid.
- Planned changes to benefits will save £3.7 billion in 2015/16.
- Most benefits, including Jobseeker's Allowance, will be increased by 1% for the next three years.
- Child benefit, currently frozen, will also rise by 1%
- The basic state pension will rise by 2.5%, in line with inflation.
- The lifetime pension tax relief for allowance will be reduced from £1.5 million to £1.25 million
- The annual allowance will be reduced from £50,000 to £40,000.
- The promise to spend 0.7% of GDP on overseas aid will be met, but not exceeded.
- Departmental resource budgets will be cut by 1% this year and 2% next year.
An increase in the general level of prices that persists over a period of time. The inflation rate is a measure of the average change over a period, usually 12 months. If inflation is up 4%, this means the price of products and services is 4% higher than a year earlier, requiring we spend and extra 4% to buy the same things we bought 12 months ago and that any savings and investments must generate 4% (after any taxes) to keep pace with inflation. Since 2003, the Bank of England has used the consumer prices index (CPI) as its official measure of inflation (see also retail prices index).
The total money value of all the finished goods and services produced in an economy in one year. It includes all consumer and government consumption, government spending and borrowing, investments and exports (minus imports) and is taken as a guide to a nation’s economic health and financial well being. However, some economists feel GDP is inaccurate because it fails to measure the changes in a nation's standard of living, unpaid labour, savings and inflationary price changes (such as housing booms and stockmarket increases).