Britain's Chancellor for the Exchequer delivers his Budget Speech
Britain will cut its corporation tax rate to 20% from 2015, according to its finance minister George Osborne.
The country's chancellor of the echequer made the announcement as part of his budget address to parliament.
As part of his speech Mr Osborne told MPs that Britain's economy will grow less this year and next than official forecasts showed in December.
The independent Office for Budget Responsibility now expects the economy to expand by 0.6% in 2013 and 1.8% in 2014, he said.
The OBR then expects the recovery to pick up to 2.3% in 2015, as forecast in December.
In December, the budget watchdog cut its forecast for economic growth in 2013 to 1.2% and predicted an expansion of 2% next year.
Britain will also borrow more in the coming years than official forecasts showed in December and will miss one of its two debt targets by another year, Mr Osborne said.
Public sector net debt, excluding the transfer of Royal Mail pension assets, will amount to 7.4% of GDP in 2012-13, 6.8% in 2013-14 and 5.9% in 2014-15, according to the latest forecasts by the independent Office for Budget Responsibility cited by Mr Osborne.
In December, the OBR predicted that the deficit would stand at 6.9% of GDP in 2012-13, 6.1% of GDP in 2013-14 and 5.2% of GDP in 2014-15.
Britain has been struggling to recover from a steep slump in output caused by the 2008 financial crisis, slipping into a second recession since then and now teetering on the verge of a third.
As part of his budget measures, Mr Osborne said he was changing the Bank of England's remit and that the central bank may need to use unconventional monetary policy along with inflation targeting.
Ms Osborne said he had run the plan by current and future Bank of England governors, Mervyn King and Mark Carney, and that they had agreed.
The bank has taken a flexible approach to its remit to target inflation of 2%.
Price growth has run above target for most of the of the last five years as the bank sought instead to prop up the economy and avoid the risk of deflation.
Despite a slump in opinion polls, Mr Osborne and Conservative Prime Minister David Cameron are sticking to their push to fix Britain's budget deficit and rising public debt, hoping for a recovery before they fight for re-election in two years time.
In a message on Twitter posted a few hours before he stood up in parliament, Mr Osborne said he would "present a budget that tackles the economy's problems head on, helping those who want to work hard and get on."
Mr Cameron's spokesman prepared the way for another round of belt-tightening, saying yesterday that the country still faced "an unprecedented peacetime economic crisis", more than four years after the near collapse of the banking system.
However there was some good news for Mr Osborne before his budget announcement.
The number of Britons claiming unemployment benefit fell in February to a 20-month low, data showed, although wage growth has lagged inflation.
The government puts much of the blame on the crisis in the euro zone, Britain's main export market. The opposition Labour Party shows no mercy in hammering Mr Osborne for his austerity.
Some inside Mr Cameron's coalition are now showing unease. The Liberal Democrat business minister has questioned whether markets would punish Britain if it borrowed to fund growth.
Business leaders largely agree that fixing Britain's fiscal health should remain a government priority, for now.
But John Longworth, head of the British Chambers of Commerce, thinks the government might need to reverse course and borrow more if there is no prospect of growth within six months: "It would be a sort of defibrillator approach to the economy," he said.
