Chancellor of the Exchequer George Osborne announced revisions to economic growth forecasts from the Office for Budget Responsibility. He said the economy is expected to avoid sliding into a triple-dip recession in the first quarter of 2013. The forecast for GDP growth was slashed to 0.6 percent for 2013 from 1.2 percent previously. GDP will then grow by 1.8 percent in 2014, up from the 2.0 percent forecast earlier.

State borrowing was projected to stand at £108 billion ($164 billion) in the year to April 2014.

The ratio of public sector net debt, as a proportion of GDP, was forecast to climb from 75.9 percent this year and peak at 85.6 percent in 2016-2017, before dropping to 84.8 percent the following year.

Osborne will seek £11.5 billion ($13.4 billion) of savings in the spending review for 2015-16. That was higher than the previously announced £10 billion, but spending on schools and health will be protected.

Public sector pay will remain capped at 1.0 percent until 2015-2016, an extension of one year.

Corporation taxation, which is levied on company profits, will be reduced from 21 to 20 percent in April 2015. The lower corporate tax levels will be funded by an increase in the bank levy rate to 0.142 percent next year.

The level at which workers would begin to pay income tax is set to rise to £10,000 ($15,100) from next year. .