By Tim Montgomerie
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The Office of Budget Responsibility predicts slower growth in Britain but no recession – so long as €urozone sorts out its problems. Big assumption. John Redwood pointed out earlier that OBR has got all of its previous forecasts wrong.
HM Treasury tweets: "Because of lower market interest rates, debt interest payments over the Parliament will be £22 billion less than predicted" …but borrowing overall will be higher.
Spectator graph of how borrowing projections have altered since March:
Osborne says higher interest rates that would follow higher borrowing would dwarf any benefits from that borrowing.
Most encouraging announcement so far from Osborne is a consultation on localising public sector pay. Unions will resist this with every fibre in their bodies.
Public sector workers will get pay rise of just 1%pa for two years after end of two year freeze.
Tax credits frozen for many.
Rise in retirement age to 67 brought forward to 2026.
Bank levy up to 0.088% to ensure it raises £2.5 billion.
£525 million shaved off development spending because, says the Chancellor, Britain was on course to overshoot 0.7% goal.
Strong attack on the financial transaction tax: It is not a tax on banks it is a tax on pensions, says Osborne.
Credit easing will underwrite £40 billion of bank loans to reduce the average interest rate charged to small businesses by 1% to 4.5%. Fraser Nelson tweets: "I wish I could applaud this 'credit easing' – but it just sounds like a recipe for sub-prime companies. Seen this movie, know how it ends…"
Lots of infrastructure funding for 500 projects over next decade paid for by pension funds (£20 billion) – "British savings for British jobs" says the Chancellor – and tighter squeeze of current spending (£5 billion). Promises superfast broadband for 90% of Britain. See map of key projects.
Announces £250 million emergency help for energy intensive industries that are being damaged by the government's climate change policies.
Business rate relief holiday extended until April 2013.
The Chancellor finds £1.2 billion from infrastructure spending for schools including £600 million for 100 new free schools, including elite maths colleges for 16 to 18 year-olds.
Cancels 2p of 5p increase in fuel duty and also, as expected, limits increase in rail prices to RPI + 1%.
The number of children receiving free nursery care will be doubled.
George Osborne sits down at 1.18pm, with promise not to be a "quack doctor selling miracle cures"… and then Ed Balls gets to his feet.
> Full autumn statement on the Treasury website.