Has George Osborne's budget done the trick?
The cost of borrowing for the UK government has fallen to an eight-month low after many investors welcomed the increased pace of austerity programs introduced to the UK. George Osborne is looking to bring down not only the budget deficit but also UK national debt much quicker than his predecessor had forecast. As a consequence it looks highly likely that the UK government will retain its AAA credit rating and the favourable rates of borrowing which this attracts. So has George Osborne finished the job?
The simple answer to that question is no, as George Osborne has taken something of a risk by reducing the UK budget and potentially pushing the economy into a recession, in a worst-case scenario. This is a big risk on the part of George Osborne and the coalition government but ultimately it was a case of further investment in the UK economy, and the risk to the credit rating, or a reduction in the budget deficit and maintaining both UK economic growth and the AAA credit rating.
Only time will tell whether George Osborne had gone far enough, too far or whether he is correct regarding his forecast for the UK economy.
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Despite a sustained effort to refloat the UK financial sector using taxpayers money, there has so far been little sign of a return to the UK population. The billions upon billions of pounds which have been ploughed back into share stakes in UK banks and the financial markets as a whole appear to have had little impact as yet. But where have the billions upon billions of pounds gone to?
