The Confederation of British Industry (CBI) has joined forces with a number of prominent UK business associations to call upon the UK government to tackle the growing budget deficit. The last few days have not been easy for Alistair Darling and Gordon Brown with prominent figure after prominent figure stepping forward to criticise the authorities for the lack of a cohesive plan to tackle the budget deficit in the short term.

While Gordon Brown has softened somewhat with regards to his "spend, spend, spend" policy of the last two years he does not appear willing to cut back on public sector investment, at least not prior to the election. This is beginning to cause some jitters in the sovereign debt market amid concerns that the UK authorities are not giving the debt problem the attention it deserves. While it is very unlikely that the UK government will default on sovereign debt we have seen problems increase and indeed there are rumours that Spain, Portugal and Ireland are still experiencing their own severe difficulties.

Whether Gordon Brown will surprise the markets with a cohesive plan to reduce the UK budget deficit in the short term, ahead of the election, remains to be seen but criticism is growing despite a band of economists joining together just a couple of weeks ago to back the government’s stance.

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