NIESR criticises government's emergency budget
The National Institute of Economic and Social Research (NIESR) has today criticised the UK government's "emergency budget" suggesting that the £40 billion in spending cuts and tax rises could easily have waited a further six months. The Institute believes that the UK government brought forward the budget, under the banner of an "emergency budget", purely and simply to grab the headlines and give the impression that the UK was addressing its debt issues unlike countries such as Greece.
Whether or not this is the case remains to be seen but the facts are that the UK budget is out of control, UK debt is growing and a reduction in the UK government's credit rating would not have been welcomed. Even though there is no doubt that the budget reduction and tax increases will reduce economic growth in the short to medium term, many believe that creating a solid base at a potentially lower level is more sensible in relation to long-term economic stability. Whether the budget has been cut too far too quickly is also another factor which will be considered in due course.
After a relatively trouble-free first few days in office there is no doubt that George Osborne's honeymoon period is now over and he is expected to introduce both budget cuts, tax rises and also help to grow the UK economy. A tall order for anybody!
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