Weaker than predicted growth coupled with poorly paid jobs hurting income tax receipts means deficit will be twice the chancellors forecast
Britains public finances are in a rotten state. The deficit-reduction plan announced by George Osborne when he came to office more than four years ago is way off track. On current trends, borrowing to fill the gap between taxes and spending will be in the region of £100bn in 2014-15. The shortfall in the first five months of the financial year is higher than it was in 2013-14.
Clearly, this leaves the chancellor with some explaining to do. As things stand, in his autumn statement later this year he will either have to announce that his plan is still further behind schedule or announce new spending cuts or tax increases to make good the slippage. Thats not where he would prefer to be with an election looming.
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