LONDON, March 11, 2008 (AFP) - British finance minister Alistair Darling unveils his maiden full-year budget this week and is odds-on to cut his economic growth forecasts due to financial markets chaos, analysts predict.

Darling, who took over as chancellor of the exchequer in June after Gordon Brown became prime minister, delivers the government's annual statement on taxation and spending before parliament on Wednesday.

Since taking office at the Treasury, Darling has faced extremely volatile financial markets, record high oil prices and the worldwide credit crunch that sparked the state takeover of British mortgage lender Northern Rock last month.

British media reports suggest that the budget could also include a windfall tax on domestic energy suppliers and environmentally-friendly measures to discourage heavily polluting vehicles.

Darling admitted recently that the economy was facing 'uncertain times' -- but predicted it would weather the current global market turbulence.

'The Budget is likely to include downward revisions to GDP (gross domestic product) forecasts for this year and next,' said Investec Securities economist Philip Shaw.

'The gloomier outlook suggests that the Treasury's 2008/09 and 2009/10 borrowing forecasts will be raised significantly -- we estimate to 39 billion pounds and 41 billion pounds (78 to 82 billion dollars).'

Darling conceded in October that the economy would face a sharp slowdown in a pre-budget announcement that was overshadowed by Brown's decision not to call a snap general election, as widely expected at the time.

The chancellor then slashed his forecast for 2008 growth to 2.0-2.5 percent from the previous 2.5-3.0 percent, citing the impact of the global credit crisis. He also predicted growth of 2.5-3.0 percent in 2009.

The British economy grew by 3.1 percent in 2007. However, it staggered to growth of 0.6 percent in the fourth quarter -- which was the slowest quarterly rate for more than a year.

'The chancellor will clearly have to lower his GDP growth forecasts,' said Global Insight economist Howard Archer.

'Darling is likely to attribute much of the UK slowdown to a weaker global growth, tighter lending conditions influenced markedly by the US subprime mortgage crisis, and high energy, food and commodity prices.'

Aside from global worries, Archer said Darling also faced domestic problems including soaring household debt, a slowing housing market and weakening public finances.

'However, it is unlikely that the chancellor will be prepared to enact major tax raising measures and/or public spending cuts at a time when the economy is faltering markedly,' Archer added.

World financial markets have been battered since August by the fallout from the US subprime housing loan crisis, which forced commercial banks to tighten lending criteria, thereby creating a credit squeeze.

Perhaps the biggest high-profile victim in Britain was the Northern Rock bank, which was forced to borrow billions of pounds from the Bank of England and was then taken over by the government.

'We all recognise that the global economy is facing its biggest test in more than a decade,' Darling said last month.

'Here in the UK, our economy remains strong and stable; we were the fastest growing economy in the (Group of Seven) last year. Growth has remained stable and close to trend for the past two-and-a-half years.

'But these are uncertain times. We do not yet know the full extent of the slowdown affecting the United States.'

Across the Atlantic, meanwhile, there are growing concerns that the United States -- the world's biggest economy -- could be on the brink of recession, a development that would send more shockwaves through the British economy.

Most analysts believe that Darling will adopt a cautious stance on Wednesday and avoid any headline-chasing gimmicks.

'A cautious chancellor would opt for a steady-as-you-go budget and re-visit any plans that he has for reform in a year's time when the outlook may look more certain,' said Geoffrey Dicks, economist at the Royal Bank of Scotland.