Government Must Persevere With Defecit Cutting Plan
20 July 2012 in Chamber News
• Public sector borrowing in June 2012 was £14.4bn, compared with £13.9bn in June 2011
Commenting on the public sector finance figures for June 2012, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said: “The deficit in June was higher than a year ago, and confirms the challenges facing the UK in restoring its public finances. Deficit reduction will be a difficult task, and will put further pressure on both businesses and consumers over the coming months. Judging by these figures, we expect total borrowing in 2012/13 to reach £98bn – £6bn more than the OBR predicted in March.
“Although there are many calls for the government to ease the pace of the fiscal squeeze, doing so now would be a mistake. The right approach is to persevere, but combine focused deficit reduction with more forceful policies to support growth. The Chancellor has earned considerable credibility in the financial markets, and now it’s time for him to make use of that credibility to help the private sector flourish. Cutting regulation, implementing the recent announcements on infrastructure and export support, and creating a business bank would help businesses drive growth.”