Pre-Budget Report: Chancellor told Britain facing ‘fiscal crisis’

| December 9, 2009 | 0 Comments

Today is the day of the Pre-Budget Report and Chancellor Alistair Darling will give more detailed plans about how the Government intends to halve the £180 billion deficit.

Moody’s credit rating agency has warned that Britain is facing a “fiscal crisis” unless the Government takes action to pay off the debt or risk losing its treasured AAA credit rating.

Moody’s added that Britain was in a fundamentally weaker position than Germany, France and Canada, which also have triple-A ratings.

Meanwhile, the Chancellor is expected to cut his economic growth forecast to 4.75% for 2009 and comes as the economy failed to emerge from recession in the third quarter.

However, economic data this week has raised fears for the fourth quarter after industrial output failed to grow in October and a CBI survey indicated that manufacturers expect output to fall in the short-term.

But Mr Darling is expected to insist that the economy will emerge from its worst recession before the end of the year - something which the National Institute of Economic and Social Research (NIESR) supports.

The NIESR recently estimated that the economy grew by 0.2% in the three months to November and hinted that fourth quarter growth was likely to be higher.

In the meantime, the Chancellor is expected to unveil a tax on bankers’ bonuses. According to the BBC, banks may face a one-off 50% levy on bonuses above a certain level.

The measure is one of many being planned by Mr Darling to target high earners. Other measures include increasing the number of people liable to pay inheritance tax, as well as an increase in capital gains tax.

The Chancellor will present the Pre-Budget Report today to the House of Commons.

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