It's now official. The tax increases of last year's two Budgets will not stall Britain's economic recovery. The Treasury's summer economic forecast revised up the prediction of UK economic growth this year to 2.75 percent from 2.5 percent at the time of last November's Budget. Although the forecast says growth of consumer spending may slow a little in the short term as a result of tax increases, this is not expected to be reflected in gross domestic product. The Treasury expects the personal savings sector ratio, which fell last year to 11.5 percent from 12.25 percent in 1992, will fall further this year to less than 10 percent. This, and a quickening of disposable income growth to 2.5 percent next year from 1 percent in 1994, should enable consumers' expenditure to increase by 3 percent both this year and next. Gross domestic product and its components | (£bn at 1990 prices, seasonally adjusted) #Expenditure adjustment For stockbuilding and the statistical discrepancy, changes are expressed as a percentage of GOP (Source: Adapted from The Financial Times, 29 June 1994) Questions Consumer Expenditure General Government Consumption Total Fixed Stock- Building Dom Demand Of Goods & Services Exporte Total Final Expenditure imports of Goods &Services Less Adjustmen To Factor Cost Plus Statatical Фівстерал GOP C Factor Cost Investments Services 1993 348.5 116.4 95.3 0.3 1994 359.3 992 0.6 1995 103.2 366 560.5 1403 700.8 153.3 71.8 0 474.9 577.2 1489 157.2 7383 74.5 488.4 170.9 76.9 5019 1993 1st half 172.5 57.9 474 0.4 278.1 69.3 2nd half 176.0 58.5 47.9 0.0 282.4 71.0 30 3474 75.7 35.7 -0.4 235.6 353.4 77.6 36.1 05 239.3 1994 1st half 178.5 58.9 49.4 03 286.5 73.5 360.0 79.9 36.9 2nd half 180.8 59.2 49.8 0.9 290.7 754 366.1 823 36.7 1995 1st half 183.6' 59.3 2nd half 186.5 59.3 on 0.7 294.6 843 38.3 0.9 298.9 79.7 378.6 $6.6 38.8 4.5 88 33 -05 242.7 -05 245.7 05 249 2 252.7 PERCENTAGE CHANGES ON A YEAR EARLIER 1993 1/4 "172" 1994 T 334 1995 1/4 poo 2