The Chancellor has warned that growth in the UK economy will be less than previously forecast as the credit crunch continues to bite.

Alistair Darling made the claim in his first Budget, and told the Commons that growth is predicted to be between 1.75% and 2.25% in 2008.

But he now expects figures for next year of between 2.25% and 2.75%, compared with the 2.5% to 3% anticipated six months ago.

Drinkers have also been penalised as alcohol duties are to rise 6% above inflation from Sunday.

That means a pint of beer will increase by 4p, while 55p is going on a bottle of spirits and 14p on a bottle of wine in an effort to crackdown on "binge-drinking Britain".

April's scheduled 2p-a-litre rise in fuel duty has also been postponed until October, but the tax will rise by 0.5p a litre in real terms from 2010.

The car tax system is being overhauled to encourage people to choose more environmentally-friendly transport, and a new "showroom tax" will hit the drivers of the most polluting vehicles.

And smokers face an 11p hike in the cost of a packet of 20 cigarettes, and a 4p increase on the price of five cigars.

However, there was some good news for thousands of first-time buyers and key workers who could see their purchasing power boosted by up to 50% with a series of new home loans.

Two new shared equity schemes will be available through the Government's Open Market HomeBuy service from April this year.

MyChoiceHomeBuy is an equity loan of between 15% and 50% of a home's purchase price which will be provided by a consortium of eight Housing Associations, and can be used with any typical mortgage.

And the Ownhome system will provide an equity loan of between 20% and 40% which can be used in conjunction with any conventional mortgage from the Co-operative Bank.

Housing minister Caroline Flint said: "We have already helped more than 95,000 households on to the housing ladder since 1997 through our low-cost home ownership schemes. These new products will help us do even more.

"Not only will the new loans increase affordability for key workers and first-time buyers, they are a lot more flexible, allowing buyers to shop around for the best mortgage deals."

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