Economists fear the economy could slump if the Bank of England goes ahead with expected interest rate rises.
Chancellor of Exchequer Gordon Brown said he expected the economy to expand at 1.75 per cent this year, until the economic pace moderates in 2001.
Brown says early action concerning rising interest rates would be vital if the economy was to avoid a return to boom-and-bust:
Speaking on the mini-Budget he said: "Those who refuse to take the necessary pre-emptive decisions to meet the inflation target risk returning our economy to the days of inflation out of control.”
Brown also announced during the mini-Budget public net borrowing will be £6.5 billion lower this financial year than predicted last year.