first posted on itsmyview
The independent Institute for Fiscal Studies (IFS) is saying that it expects that the UK government will need to raise taxes or cut spending by an extra £20bn to repair the public finances. It also says that it could be 2030 before the UK gets back to pre crisis levels.
The International Monetary Fund (IMF) has also predicted that the UK will have the worst fall in economic growth among advanced nations this year. Gordon Brown has rejected this claim by the IMF but this is the man who did not see the recession coming, so why should he be in any position to know what will happen next!
The IMF report also says that taxes are likely to go up more than has been said by the government.
Even if everything goes according to plan, the IFS points out that it will be “the early 2030s before debt returns below the ceiling of 40% of national income” that Gordon Brown set as one of his key fiscal rules in 1997.
We are clearly in a big mess, and it is a mess that is going to go on for a long time. Even once the recession has lifted, people will be paying, through their taxes, for the huge borrowings for a long time. In addition any taxes required to actually do anything new will also have to be levied (unless the country borrows yet more money!)
