PwC concerned about return to recession

PwC has today issued a damning report on the UK economy and UK finances with a suggestion that a possible return to recession is a 25% to 30% probability. The report also suggests that the next incoming government will need to find an additional £20 billion a year to balance the books in the short term with an increase in VAT and the introduction of various environmental taxes likely to hit the UK statute books in the short to medium term.

This report, by John Hawksworth (the head of economics at PwC), carries much sway in the market place and indeed the ever-growing chance that the UK could slip back into recession is a major concern. While the UK government will not admit to a potential black hole in UK public sector finances it is becoming more and more obvious that an attack on the budget deficit needs to occur sooner rather than later with government coffers running dangerously low.

The truth is that whatever the real situation with regards to UK public sector finances it will be taxpayers and businesses which will pay the price. The banking industry, which has received billions upon billions of pounds of financial assistance in the short term, has walked away scot-free and indeed many banking companies appear to be enjoying the boom times once again.