Wednesday March 12, 02:24 PM
UK BUDGET Darling's UK budget forecasts 'unduly optimistic' - BCC
LONDON (Thomson Financial) - The forecasts in the UK budget presented today by Chancellor of the Exchequer Alistair Darling are still too high despite being revised down from the Pre-Budget Report in October, the British Chambers of Commerce
said.
Darling today cut the GDP growth forecast for 2008 to 1.75-2.25 pct from 2.0-2.5 pct in October. For 2009, the estimate of 2.25-2.75 pct growth was cut from 2.50-3.00 pct.
'The Chancellor's Budget economic forecasts remain unduly optimistic,' said David Frost, director general of the BCC.
He said the upward revision for next year's public sector net borrowing -- to 43 bln stg from 38 bln previously -- was realistic, but that the figures for subsequent years remained hopeful.
'Over the medium term there is a very major risk that the fiscal rules would be breached without further action,' said Frost.
Meanwhile, the BCC said that the planned 2 pence fuel duty rise, which Darling today said would be deferred to October, ought to be scrapped altogether.
The duty increase, announced in Darling's Pre-Budget Report in October, was supposed to come into effect in April but has been postponed because of rising energy costs for consumers.
'With the price of petrol at the pump rocketing, the Chancellor was right not to introduce the proposed 2p rise in fuel duty,' said Frost.
'However, as the Chancellor reduces his own economic growth forecasts, he should have said that he is scrapping the 2p rise rather than merely deferring it,' Frost said.
|
Send Article by Email
