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The £45 billion hole in the UK budget

While the headlines after Wednesday's budget were fairly encouraging for the Labour Party the last 24 hours has seen a significant U-turn in the world of economics. A prominent think tank has been reviewing the announcements from Alistair Darling and the impact upon government finances. It would appear that using government spending and taxation figures there is a £45 billion a year black hole in the UK budget which will need to be filled with tax rises and spending cuts by 2017/18.

Conveniently, Alistair Darling is currently out of the country on business and unavailable for comment on the claims made by this prominent think tank. If he is unable to clarify the situation this will take away more and more credibility from the UK government and this week's budget in particular. As we have seen so many times before, with both Tory and Labour budgets in the past, the devil is in the detail as ever and can often flip a headline on its head.

The UK government has taken a significant chance with this week's budget although if the gamble does pay off it could see Gordon Brown returned to office in 2010. However, at this moment in time the "clever money" is on the government being "found out" in the run up to the next general election which could hand power to the Conservative party.

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