LONDON, March 3 - British finance minister Rachel Reeves said she would provide stability for the economy in a budget update speech on Tuesday that contained no big policy surprises and was overshadowed by alarm among investors over the conflict in the Middle East.

Reeves said fresh forecasts showed inflation and borrowing would be lower than previously thought by Britain's fiscal watchdog, although its economic growth projection for this year was cut to 1.1% from a previous estimate of 1.4%.

Those forecasts may soon be overtaken by the impact of the U.S.-Israeli war against Iran which has sent British government borrowing costs soaring on worries about the global surge in energy prices.

"This government has the right economic plan for our country, a plan that is even more important in a world that in the last few days has become yet more uncertain," Reeves said in her speech to parliament.

"It is incumbent on me and on this government to chart a course through that uncertainty, to secure our economy against shocks and protect families from the turbulence that we see beyond our borders."

PROMISE OF STABILITY IN TURBULENT TIMES

Reeves stressed the need for predictability in government policy as well as investment in infrastructure, accusing the previous Conservative administration of allowing inflation to soar and interest rates to rise to a 15-year high.

"Stability is the single most important precondition for economic growth," she said.

Reeves is hoping that a period of policymaking stability - after the political turmoil triggered by the Brexit vote 10 years ago - will encourage businesses to invest.

Many employers say higher taxes and other costs imposed on them by Reeves are deterring them from hiring.

In her speech on Tuesday, Reeves said she would set out proposals for closer post-Brexit trade ties with the European Union in the coming weeks and the government would set out reforms for reducing youth unemployment, which has risen s...