UK budget deficit races away

| April 22, 2010
UK budget deficit races away

The UK’s annual budget deficit soared to A?162.4 billion in the 12 months to the end of March, but fell short of the A?167 billion forecast in last month’s Budget.

With the deficit is at its highest since the Second World War and total government debt now at A?890 billion (or 62% of GDP) all eyes are on the prospects for economic growth as an alternative to savage public spending cuts.

However, earlier this week, Ernst & Young ITEM Club described the prospects for economic recovery in 2010 as “dismal” with output growth likely to be about 1%.

In its latest a�?Outlook for Businessa�? report, the respected economic forecaster warned: a�?An export-led recovery is really a growth story for the UK from 2011 onwards, not for this yeara�?.

For 2009 as a whole, Britain’s GDP contracted by 4.9% compared with growth of 0.5% in the previous year.

According to the Office for National Statistics, GDP increased by 0.4% in the fourth quarter of last year but was still 3.1% lower than in the same period of 2008.

GDP figures for the first quarter of 2010 are due out tomorrow.

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