UK Treasury chief announces stimulus measures

LONDON (AP) -- British Treasury chief Alistair Darling has announced a temporary cut in the national sales tax to promote an economic recovery he expects to begin next year.

Darling says the value-added tax would be cut from 17.5 percent to 15 percent for 13 months to put more money in consumers' pockets as a key part of a 20 billion pound ($30 billion) economic stimulus plan.

He predicts that the British economy will shrink by as much as 1.25 percent next year although he expects a recovery to begin in the second half.

As expected, he also proposed Monday that the top tax rate go up from 40 percent to 45 percent in 2011.

(Copyright 2008 by The Associated Press. All Rights Reserved.)

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