Posts Tagged ‘Finances’

The Govt. posted it’s worst borrowing figures since records began in 1993 for January. The UK borrowed £4.3 billion last month to try and curb the out of control finances.

Sharp rise in spending and drop in tax receipts means Britain borrowed last month rather than repaying £2.8bn as economists expected. The effects of the recession seem to be still hitting the UK as the country were unable to post the usual surplus enjoyed in a January, a month when income tax and corporation tax revenues typically pick up.

The Office for National Statistics (ONS) said public sector net borrowing (the gap between the exchequer’s tax-take and its spending) was £4.34bn compared with a repayment of £5.27bn a year earlier. The figure was also much worse than the £2.8bn repayment forecast in a Reuters poll by City analysts, who in previous months had largely underestimated the state of the public finances.

Britain’s high deficit, lagging growth rate and high inflation have prompted many to speculate that it could be the next nation to alarm the world following Greece and Spain down the same route.  Although the treasury were quick to say that the government would meet or even beat chancellor Alistair Darling’s borrowing forecasts for the full year many are not convinced and this latest blow to the labour party could prove crucial in the next election.

This comes straight after news of the worst unemployment figure under Labour.VAT income was up 16 per cent year-on-year thanks to the rise back to 17.5 per cent on January 1. But spending hit £49.5billion for the month, with the cost of social benefits up 3 per cent to £14billion. There was some good news however as new figure revealed that car production enjoyed its biggest rise since May 1976!

Another dilemma has hit the UK economy at a very bad time when the country is trying to recover from the worst recession since the Great Crash.

How Britain's public sector net debt has spiralled in the past ten months, while debt as a proportion of GDP has soared since 2002

What are your views? Are Labour responsible or should they be given time to try soak up the problems faced by the UK?

Many Economists and analysts feel the Chancellor is underestimating the situation. What can be done to stop the ever-growing deficit? Would a Robin Hood Tax work? Surely it would be an easy way of collecting a lot of money given the amount of financial transactions taking place everyday. These figures show how much damage the recession has done and is still doing. ‘Trying to close the gap now when the economy is still so fragile would be a huge mistake and risk jobs and tax revenue in a double-dip recession’ –I couldn’t agree more.


ONS,BBC,Daily Mail,Guardian


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