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Are you frightened of UK spending cuts?

As the latest BDO business trends survey casts a very dark shadow across the UK economy there is a suggestion that UK consumers are "frightened of spending cuts". There is growing concern that consumer sentiment has been impacted by the headlines in the financial press with regards to UK budget cuts even though the vast majority of these will be phased in over a four-year period. While there will be definite pain in the short-term there is no doubt that the UK government cannot afford to phase in massive cuts in a very short space of time.

However, some of the headlines in the financial press appear to suggest that we are on the verge of a multibillion pound public spending review which could be phased in immediately. This is not the situation and the rumours of 20% plus spending cuts across the board do not relate to any one specific year and could see around 6% of savings each and every year for the next four years. This does not look half as bad as a potential 20% plus reduction in public-sector spending within 12 months!

Perhaps the UK government needs to address how the message is coming across and any changes which can be made?

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