Chancellor of the Exchequer NigelLawson, presenting his budget for fiscal 1987/88 to parliament,
said U.K. Economic growth was forecast at three pct in calendar
1987.
    He said the Treasury expected a current account balance of
payments deficit in 1987 of 2.5 billion stg, after a 1.1
billion shortfall in 1986. Inflation is expected to be 4.0 pct
at the end of 1987, he said, adding it may exceed 4.5 pct by
the summer before falling back to 4.0 pct by the end of the
year.
    The planned PSBR for 1987/88 was 4.0 billion stg unchanged
when compared with the likely outturn for fiscal 1986/87,
Lawson said.
    Although no explicit target was set for the broad sterling
M3 money supply, Lawson said broad money will continue to be
taken into account in assessing monetary conditions as well as
the exchange rate.
    The low outturn of the PSBR in 1986/87 was mainly due to
the buoyancy of non-oil tax revenues in general, and the
corporation tax paid by an increasingly profitable business
sector in particular.
    On oil prices, Lawson said he was sticking to his earlier
assumption that North Sea crude prices will average 15 dlrs per
barrel in calendar 1987. The treasury would strive to keep the
PSBR at 1.0 pct of GDP in future, he said.
 Reuter
