LONDON (AP) — Treasurer of the Exchequer Gordon Brown said Britain’s economy is growing faster than anticipated, raising his forecast for this year by a half percentage point to 2.75 percent.In an annual address to Parliament, Brown cited strong business investment and rising exports as the reason for the growth upgrade.

In his March budget announcement, he had forecast economic growth of 2.25 percent for this year.

Brown maintained his growth forecasts of 2.75 percent to 3.25 percent for both 2007 and 2008.

That is in line with the Bank of England’s growth projections of 3.0 percent in 2007 and 2.9 percent in 2008.

“Despite contending with global imbalances, exchange rate uncertainties, stalled trade talks and high commodity prices, Britain’s investment-led, export-led growth is forecast to continue in 2007, investment and exports both to rise by 5 percent or more,” Brown said.

The revision was the centrepiece of a report that is being viewed largely as a political manifesto for a leader-in-waiting.

Brown is widely seen as the likely successor to Tony Blair, who has made public his intention to step down as prime minister next year.

Brown said that Britain has enjoyed the longest run of sustained growth since the Second World War of all major economies, such as the US, France, Germany and Japan.

He added that productivity has risen since the Labour Government came to power in 1997, and that it was narrowing the gap with the United States.

Brown emphasised plans to improve education, which he said was vital for Britain to meet challenges from emerging economic powerhouses such as China and India.

Universities will receive $60 million ($120 million) a year for applied research with commercial potential to help British science to transform knowledge into new jobs.

Brown also announced a number of environmentally friendly measures, including an increase in the fuel duty and a rise in the air passenger duty. Domestically, he pledged that every new home would be carbon free in ten years.

The boost in the economic growth forecast for 2006 is a turnaround from last year, when Brown was forced into an embarrassing downgrading of his growth predictions after months of warnings from economists that he was being too optimistic.

His new forecasts were challenged by the opposition Conservative Party, which claimed they masked an underlying economic malaise.

“The growth he indicated puts Britain 21st out of 25 members of the European Union,” said Conservative Party Treasury spokesman George Osborne.

Osborne also criticised Brown for failing to address problems with Britain’s ailing public health system.

On other economic measures, Brown said that the government’s two percent inflation target would be met in mid-2007 and remain on target in 2008.

He confirmed that the government was on course to meet both of its fiscal rules, the golden rule, and the sustainable investment rule.