UK Chancellor of the Exchequer Alastair Darling, speaking in advance of the Budget on April 22, 2009

UK Chancellor Alistair Darling has been delivering his Budget speech in the House of Commons and has told MPs he expected the British economy to start growing again "towards the end of this year." Borrowing is to rise to 12.4% of GDP.

He cut the forecast of economic growth for the British economy, saying he expected it to contract by 3.5% in the current year. But he said the UK economy would grow by 1.25% in 2010, while retail price inflation - which includes mortgage repayments - would fall to -3% by September. Darling said public borrowing is to increase to £175bn this year - - 12.4% of GDP - - and borrowing levels will rise by £173bn, £140bn, £118bn and £97bn in years after.

Income tax for those earning more than £150,000 will rise to 50% from April 2010 while tax relief on pensions for those paid more than £150,000 is to be reduced.

Darling also announced plans to restrict pension tax relief for those with incomes over £150,000 from April 2011, so it is gradually tapered to the 20% rate.

To help the UK housing market, the Chancellor extended a stamp duty holiday on properties sold for less than £175,000, until the end of the year.

Darling said the British government was working with employers to create or support as many as 250,000 jobs. £260m of new money will be allocated for training and subsidies for young people to help them gain skills and experience.

He announced help for jobless young people and a car scrappage scheme - with £2,000 for people who trade in cars over 10 years old for new ones.

Everyone under the age of 25 out of work for 12 months or more will be offered a job or a place on a training scheme. In addition, the government will create or support up to 250,000 jobs in deprived areas.

Darling also announced an expansion of sixth form and further education places.

He announced a scheme to guarantee mortgage backed securities to boost lending, stamp duty holiday for homes up to £175,000 to be extended to end of year and an extra £80m for shared equity mortgage scheme. £500m has been allocated to kickstart stalled housing projects.

There will be measures to support investment in the growth and green industries of the future and the government will work to rebuild the UK's financial services.

Alcohol and cigarettes taxes to go up 2% from midnight and fuel duty to rise by 2p per litre from September.

UK Treasury Budget microsite