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While today’s decision by the Bank of England MPC was literally a no brainer it does not help the thousands of home owners who are struggling to make ends meet. As we read another report from the...
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Friday 18th July 2008
After it was announced that the UK government has borrowed a staggering £24 billion in the first quarter of 2008, the highest level since records began back in 1946, there are grave concerns in the City that Gordon Brown is set to move the fiscal goal posts.
Rather than face the embarrassment of breaking his own fundamental rules on financial spending, rumour has it that we may see a change in these key features of Gordon Brown’s time at the Treasury. As the public purse becomes ever more stretched and the government is forced to borrow more and more to meet budget requirements, something needs to be done and quickly.
If the authorities decide to break their own fiscal rules and let public sector creep above 40 percent of National Income or allow borrowing to continue beyond the end of the current economic cycle, Gordon Brown will be ridiculed by the opposition parties. Faced with a very difficult time in the House of Commons it seems as though he may well have decided to introduce subtle changes to the rules so that they are not broken.
However, if he goes down this route there is a real danger that he will lose the confidence of the City, something which would surely spell the end of his time in office. |
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