How low can the UK public sector budget go?
Over the last few days it has become more and more apparent that George Osborne's initial slashing of the UK public sector budget will have a massive impact upon not only public sector workers but also private sector companies. This comes at a time when the UK economy is struggling to pull clear of the recession and more and more financial experts believe we are heading towards a double dip recession. So how low can the UK public sector budget go?
Initially it had been assumed that any vacuum created by public sector budget cuts would be filled by private sector companies, although this has not been the case so far. A number of private sector companies working for public sector authorities have already expressed their concern that contracts have been delayed, cancelled or reduced. There is also confusion and concern that we have yet to see the majority of budget cuts announced by the government with many tens of billions of pounds of savings to be announced.
When you also take into account the fact that UK taxes are likely to increase in the medium to longer term there is concern about funding for the UK economy and whether indeed the fragile recovery will continue.
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