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As the UK economic turmoil continues there is hope today that we may finally have seen the end of the boom and bust economic cycle if UK authorities learn by their recent mistakes. But is this...
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Thursday 5th June 2008
The renowned Organisation for Economic Co-operation and Development (OECD) has attacked the UK government for an ‘excessively loose’ fiscal policy over the last 10 years and slashed forecast for the UK economy. They have cut their growth predictions from 2 to 1.8 percent for 2008 and from 2.4 to 1.4 percent for 2009. These figures are well below the Treasury’s current forecast of 2 to 2.5 per cent.
While the figures themselves are bad enough it is the stinging attack on the so called Iron ex-Chancellor, Gordon Brown which has caused most concern in political circles. The OECD is an international recognised body which has an excellent reputation and a habit of calling the economies of the world correctly.
If these latest forecasts turn out to be correct then the UK budget deficit could balloon over the next couple of years with tax income slashed and a potentially massive rise in social security payments. The OECD has even called into question the government’s own economic guidelines and fully expects them to breach the 40% ceiling on public sector debt as a percentage of GDP.
While there is unlikely to be any comment from the government about the latest report from the OECD there are really concerns that the UK is heading for a larger fall than many had even considered never mind predicted. |
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