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UK could be looking at having a higher deficit than Greece next year

Sunday, 23 September 2012
With the British government persistently finding it hard to reduce its deficits and with the economy resisting any form of growth push, there is growing fears that the British economy could see its deficit grow larger that expected, surpassing the levels of Greece and Spain.

This is the view of a research conducted by Morgan Stanley, reported by the British newspaper, the Telegraph. It holds that Britain could be heading for a bigger budget deficit next year than crisis-hit Greece and Spain, the paper writes.

This comes from the findings in which economists at the investment bank calculated that Britain’s budget deficit could total £126 billion, or 7.8percent, of gross domestic product in 2013-14.

This would therefore place Britain on path with the highest projected European deficit along the lines of debt defaulters in Europe such as Greece, with Morgan Stanley predicting that Greece’s would stand at 6.3percent and Spain’s at just under 6 percent, writes the Telegraph.

The new British coalition government came in three years ago to "clean the mess" left by the former Labour government. Admits call that gradual and gentle austerity being introduced so that growth and fiscal responsibility would work hand in hand, in a way that growth will pay for any government cuts. The government instead went in for deep and sharp cuts leaving the economy bare thus increase borrowing.

The Government borrowed £61.3billion – 26.7percent more in the past five months than in the same period last year. The official borrowing target for the year is a rise of just 0.5percent.

At the time of writing, the UK is still in recession and the fear now is that things will even get worse as the government will come in further more in more cuts in its autumn budget.
By Scancomark.com Team
Link: Telegraph