Effect of the Budget Announcement on the Economy Essay

Effect of the Budget Announcement on the Economy - Essay ExampleThis has occurred as a result of the announcement made on figure day alcohol was subjoind by six percent over inflation. Spirits, wine and beer were all unnatural by this price elevation. (British Retail Consortium, 2008)The speech has also affected the rate of availability of fuel. The chancellor announced a fuel allowance for mature citizens. However, such an allowance had to be compensated by opposite users of the resource. This announcement actually contributed to the rising fuel costs. Besides that, the chancellor also announced that polluting vehicles would have to invent up higher road imposees than their green counterparts. This would have been a way to offset the allowance given to aged(a) citizens.However, the chancellor asserted that the measures would be implemented in the month of October. This is already starting to cause tax contributors and may continue to do so in the year 2009. Perhaps the major reason for this frustrate was to appease economists and consumers who were likely to demonstrate over rising fuel costs on the streets. However, environmentalists are non very happy active the chancellors moves. They feel as though they have been short-changed by his delays.The money mart did into improve in any way. Before March, the UK was the country with the highest inflation rate in G7. As if that is non enough, the country also has an extremely high budget deficit. Many analysts assert that the chancellor expressed optimism for the next of the country yet the rate of borrowing within the UK did not give him reasons to be optimistic. This is still the plate presently. The last mentioned results could have been heightened by the fact that the budget was extremely tight. Almost all the finances were allocated somewhere. The general result was that there were no savings or available finances to dispose off. (Meader, 2008)The overall predictions about the economy within the budget speech also came true. The UK is operating within a volatile world-wide market where the economy outside UK is negative. The same has affected the UK too. This is also likely to continue into the next year. However, even out that pessimism was still not up to per with the current reality. Chancellor Darling announced that the UK economy would increase by between one point eight and two point two percent. This level has still not been achieved today as borrowing levels have exceeded predictions made earlier.Overly, the budgetary effect seemed to have been offset. This is because the Chancellor was announcing the budget against the following issuesA global credit crisisPublic finances that were tightA slow domesticated economyThe Chancellor was faced with the option of cutting down taxes thus promoting growth or he could have increased taxes and promoted public financing. Each measure would have totally different effects the antecedent would have caused a lot of discrepanc y from financial market stakeholders as it would be detrimental to that sector. Additionally, the latter measure would have derailed the economic process. What the Chancellor decided to do was to reduce taxes in certain areas and increase them in other areas