Economic report: November’s headlines
The TUC’s latest economic report was released just ahead of the Autumn Statement. It predicted that the Chancellor would have to raise his borrowing forecasts by over £120bn – in the end he raised them by £158bn. This bit of over-optimism (or rather under-pessimism) aside it is still worth a read.
The headline findings were as follows:
- Since the Government first set out its plans a £65bn growth gap has opened up.
- As a result cumulative borrowing is set to increase by £123bn.
- Over the next four years £83bn of spending cuts & £29bn of tax rises will only cut the deficit by £56bn.
- The real problem over the past 18 months has been a collapse in domestic demand not the Eurozone’s troubles.
- The Eurozone economy has grown faster than the UK over the past year and analysis by the OECD suggests that the UK slowdown preceded the Eurozone slowdown.
- With domestic demand depressed and the international picture getting darker the prospects for the UK economy look grim.