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British borrowing could reach record levels

March 29, 2009    Posted in: Debt News
A leading economic think-tank has predicted that government borrowing over the next few years will greatly exceed previous predictions if Britain’s finances are to get back on track. The Ernst & Young Item Club claims that public finances are deteriorating at a rapid rate, as personal debt becomes a greater issue and consumer spending power continues to fall. The think-tank has forecast that borrowing will rise to around £180 billion during the next tax years, and that this will affect the government’s ability to start to fix the country’s economic woes. It has been predicted that the UK may have to borrow more than12% of its national income levels to battle the current financial crisis – the highest level of any developed nation. Furthermore, Britain is expected to be running deficits for the next ten years. Ernst & Young believes that pre-budget promises by chancellor Alistair Darling have been overtaken by subsequent events, and that the UK’s total borrowing could be up to £270 billion than previously anticipated. The think-tank has called for new measures such as cutting national insurance companies to encourage businesses to hire staff, in order to strengthen the workplace and encourage greater spending. The Item Club also claims that the government should provide credible predictions for public finances, and that it must compose a clear medium-term plan for nursing public spending back to health.
March 29, 2009    Posted in: Debt News

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