LONDON, March 16 (Xinhuanet) -- Britain's Labor government Wednesday sought to put the economy at the center of its bid for athird term in power and promised not to raise the basic or top rates of income tax while announcing its intention to raise the thresholds of stamp duty and inheritance tax.

    With national polls expected in May, British Chancellor of the Exchequer Gordon Brown stressed in his ninth budget report that Britain has enjoyed continued economic stability with low inflation, low unemployment and low interest rates as well as the highest ever employment.

    Brown said that "Britain is today experiencing the longest period of sustained economic growth since 1701" and has seen growth for the fiftieth consecutive quarter.

    He said Britain's economic growth in 2004 was 3.1 percent and he forecasts 3.0 to 3.5 percent growth in 2005 and 2.5 to 3.0 percent the following year.

    He also forecast government borrowing of 34 billion pounds (65.28 billion US dollars) for the 2004/05 fiscal year ending March 31.

    Turning to taxation, Brown said the threshold at which house buyers pay stamp duty would be doubled from the current 60,000 pounds (115,200 US dollars) to 120,000 pounds (230,400 US dollars)while the inheritance tax threshold would rise from the present 260,000 pounds (499,200 US dollars) to 300,000 pounds (576,000 US dollars) by 2007.

    He also unveiled a series of tax reliefs including credits for films and research and development projects.

    Brown also provided targeted support for a range of groups including savers, working families, pensioners and first-time house buyers who are also being wooed by the other two main opposition parties.

    He purposely avoided any substantial tax-raising measures aheadof the expected general election, a usual practice by competing parties struggling for power.

    The country's main opposition parties -- the Conservatives and the Liberal Democrats -- also propose hikes in the thresholds of stamp duty and inheritance tax as key points in their campaign manifestos.

    At present, the battle lines are clear between the governing Labor and its main rival the Conservatives. Tony Blair's Labor government has pledged to increase spending on the state-run health service, education and other public services. The Conservatives have pledged to cut government spending and taxes.

    But Labor currently faces challenges on public finances with Brown is perilously close to breaking his self-imposed Golden Rulewhich states that the government will only borrow money to re-invest, not to fund capital projects, in order to produce a balanced budget.

    That means over the course of the economic cycle, the current government budget -- paying for everything from school books and hospital bandages to ammunition for the troops in Iraq -- must be in balance. But higher than expected government spending has pushed this rule to its limit.

    Over the past five years, public finances have deteriorated from a surplus of around 15 billion pounds (28.8 billion US dollars) a year to a deficit of around 35 billion pounds (67.2 billion US dollars).

    Independent economists expect Brown will have to raise taxes byaround 10 billion pounds (19.2 billion US dollars) at some point if he is to restore the fiscal position to its previous healthy state.

    However, British economic growth is widely expected to be 2.5 percent this year and next year against Brown's prediction of 3.0 percent for 2005. This adds to concerns that the government cannotexpect increased tax revenues from a higher economic growth rate.

    The Organization of Economic Cooperation and Development (OECD)said Britain's budget deficit risks surpassing 3.0 percent and breaking the ceiling laid down in the European Union's Stability and Growth Pact. Enditem