Commenting on the public finance figures for May, published today by the ONS, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said:“These figures were slightly better-than-expected and show that the deficit has started easing - even before the government begins to implement its deficit-reduction plan. However, there is no room for complacency and a credible reduction programme is vital to ensure we preserve our credit rating.“The new figures reinforce hopes that a plan to cut the deficit can be carried out without causing undue damage to the economy.
“Next week’s Budget will be a huge challenge for the coalition. While the markets must be left in no doubt that the government is serious about spending cuts, it is critical to avoid hasty measures that risk pushing the economy back into recession. There should be a freeze in the total public sector wage bill and reform of unaffordable public pensions. But, the Chancellor should steer clear of policies that restrict the private sector’s ability to lead a sustainable recovery.”