Magazine article Public Finance

Numbers Game

Magazine article Public Finance

Numbers Game

Article excerpt

Chancellor George Osborne was forced to admit in November's Autumn Statement that debt will not be under control by the time of the next election and spending cuts will have to continue until 20L7.

The significance of this announcement was summed up by the influential Institute for Fiscal Studies. 'Until now, we had been thinking of four years of cuts as unprecedented in modern times. Six years looks even more extraordinary,' it said.

In a statement that acted more like a miniBudget, Osborne revealed lower growth forecasts and higher borrowing estimates. Growth is likely to be just 0.9% in 2011 and 0.7% in 2012, while borrowing is expected to reach £127bn this year.

A double-dip recession has so far been avoided, but the chancellor said that 'if the rest of Europe heads into recession, it may prove hard to avoid one here'.

To help Britain live within its means', Osborne announced that public sector pay rises will be capped at 1% after the current pay freeze ends. …

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