Next month's increase in fuel duties will be staged. Fuel duty will rise by a penny in April, followed by a further 1p rise in October and the remainder in January.
The Chancellor said by the time the full rise comes in, in January, he forecasts inflation to be back below 2% and confirmed the Bank of England inflation target remains unchanged at 2%.
VAT receipts are now £3 billion higher than forecast and better company profits have led to higher Corporation Tax receipts, with spending broadly in line with his forecast, said Mr Darling.
Borrowing this year should be £11 billion lower than forecast. In 2010/11 borrowing will be £163 billion, falling to £131 billion in 2011/12, then £110 billion in 2012/13. In 2013/14 it will be £89 billion, reaching £74 billion in 2014/15, £8 billion lower than forecast in December.
Debt will be £100 billion lower by 2013/14 than was expected at last year's Budget. As a share of the economy, borrowing is forecast at 11.8% of GDP this year, 11.1% next year, then 8.5%. In 2012/13 it will be 6.8%, then 5.2%, falling to 4% in 2014/15.
Mr Darling said this means a reduction in the deficit from 11.8% of GDP to 5.2%, more than halved over a four-year period, with the structural deficit estimated at 8.4% of GDP this year, falling to 2.5% by the end of the period.