Treasury chief of Great Britain declares economy strong, inflation on target as he presents annual budget

British Treasury Chief Gordon Brown said the domestic economy is strong and growing, with inflation on target, as he presented his 10th annual budget Wednesday.

Photo: Treasury chief of Great Britain declares economy strong, inflation on target as he presents annual budget

"The British economy is strong and strengthening," Brown told Parliament. He said the economy grew at 2 percent in the last quarter.

The treasurer added that inflation is sitting at 2 percent, the target set by the Bank of England, and the government remained watchful of external factors that could push prices up.

"We will continue to be vigilant of global imbalances and oil prices, and we will take no risks with inflation at home," he said.

Brown came under fire from economists last year for his overly optimistic forecasts for the economy, and eventually downgraded his predictions significantly to 1.75 percent growth in gross domestic product for the year, marking the slowest expansion since 1992.

The revision in December's pre-budget report was well below the 3-3.5 percent growth that Brown had forecast in his March budget.

The budget is being closely examined for clues to how Brown would act as prime minister a job he is expected to take when Tony Blair steps down at a still unknown date, reports the AP.

D.M.