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UK government under pressure over spending cuts

The UK government has today come under serious pressure from the Institute of Directors and Confederation of British Industry who have called for an immediate reduction in spending plans from the UK government. The comments come at a time when the UK government would appear to favour tax increases as opposed to investment spending cuts, something which the business arena is growing more and more concerned about.

There is no doubt that the £178 billion budget deficit expected in the current tax year needs to be addressed sooner rather than later but whether the UK government will be brave enough to push forward with cuts prior to the election remains to be seen. It is also worth remembering that the British Chamber of Commerce only a few days ago reigned in its forecast for economic growth in 2011 from 2.3% to 2.1%. Whether these are just short-term adjustments on the long road to recovery remains to be seen but there is concern about how the UK government will address the financial constraints before it.

What is becoming more evident is the fact that the UK government is at a crossroads and needs to address the budget deficit and the financial situation in the UK as soon as possible. Whether we see increased taxes or investment cuts, or a mixture of the two, we need to see action sooner rather than later.

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