UK budget deficit forecast at £114 billion for 2010/11
The new Office for Budget Responsibility has today issued a statement suggesting that the UK budget deficit will be around £114 billion for the 2010/11 tax year. This is slightly lower than the £124 billion forecast by Alistair Darling before his departure from number 11 Downing Street but is still a massive figure. The deficit is expected to fall to around £48 billion by 2014/15 which is again lower than the £51 billion forecast by the Labour government while in office.
Interestingly, while the Office for Budget Responsibility has been very critical of the Labour Party's economic forecasts for 2010 and 2011 it looks as though government income will be higher than expected. This is a little bizarre because if the economic forecasts for 2010 and 2011 have been downgraded then surely you would have expected government income, from taxation, to have fallen as well?
In a rather disappointing note it was also announced that net borrowing for 2010/11, which includes spending on public infrastructure, will be around £155 billion falling to around £71 billion by 2014/15. Again, these figures are less than the previous UK government forecasts of borrowings of £163 billion and £74 billion.
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