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==Overview==
Lawson had begun to raise the UK's interest rate in June 1988 as a way to control inflation, and by March 1989 the interest had reached 15%, while inflation was running at 7.5%. In his budget statement, Lawson predicted inflation would continue to rise for a short while, peaking at 8%, before dropping back to 4.5% by early 1990. The previous year had also seen a housing boom, which had started to slow by the time this budget was preseted.<ref>{{Cite web|url=https://api.parliament.uk/historic-hansard/commons/1989/mar/14/economic-performance-and-prospects|title=ECONOMIC PERFORMANCE AND PROSPECTS (Hansard, 14 March 1989)|website=api.parliament.uk|accessdate=23 November 2022}}</ref>
Among the measures announced by the Chancellor were a reduction in the amount of [[National Insurance]] contributions, something that would leave earner £3 per week better off, while the thresholds for [[inheritance tax in the Untied Kingdom|inheritance tax]] and [[Value-added tax in the United Kingdom|VAT]] were increased. The rule that penalised state pensioners who continued to work beyond their retirement was abolished, while proposals were outlined for a tax relief scheme to enable elderly people to buy private health insurance. A 3.6p per gallon reduction was announced on [[Excise#United Kingdom|excise duty]] on [[unleaded petrol]], making it almost 10p a gallon cheaper than [[leaded petrol|leaded]], but there were no changes announced to duty for alcohol or cigarettes.<ref name="auto">{{Cite web|url=http://www.theguardian.com/uk/1999/mar/03/budget1999.budget10|title=Bygone budgets: March 1989|first=Guardian|last=Staff|date=3 March 1999|website=the Guardian|accessdate=23 November 2022}}</ref><ref name="auto1">{{Cite web|url=https://www.bbc.co.uk/news/special/politics97/budget97/background/bud1979_92.shtml|title=BBC Budget 97|website=www.bbc.co.uk|accessdate=23 November 2022}}</ref>
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