"We have held our nerve while those who predicted there would be no growth until we turned the spending taps back on have been proved comprehensively wrong."
- George Osborne, U.K. Chancellor of the Exchequer
The U.K. policy makers refrained from additional stimulus measures, widely meeting analysts' expectations, as Chancellor of the Exchequer George Osborne upgraded a growth forecast. The Bank of England left its key refinancing rate and the asset-purchase programme at 0.5% and 375 billion pounds respectively.
According to Chancellor's projections the domestic economy will expand 1.4% this year, more than double the pace from the level expected in March. For the next year the Office for Budgetary Responsibility predicts an expansion of 2.4%, up from 1.8% predicted in spring, while 2015 projection was revised down to 2.2% from 2.3%. Another welcoming sign for the government is that net borrowing will record a small surplus for 2018-19, while in a shorter term it will fall to 6.8% in 2013. Brighter outlook is marking a boost for Osborne's and Cameron's party during the start of election campaign for 2015 election.
Following Osborne's forecasts, BoE Governor Mark Carney pointed out that despite stronger growth and healing economy, almost one million people more are still out of work than in the years before the financial crisis. Nevertheless, the unemployment rate is now expected to drop to the desired 7% level before 2016.
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