View Full Version : George Osborne's borrowing targets will be hard to meet

23rd April 2016, 16:24
The slowing economy will mean fewer tax receipts but more speculation on whether spending cuts or tax rises are needed to reach a 2020 budget surplus

Earlier this week the Treasury made some confident projections about what the economy would look like in 2030 in the event of a vote to leave the EU in June’s referendum. The hazards of forecasting even one month ahead have now been illustrated.

At the time of the budget, the number crunchers at the Office for Budget Responsibility (OBR) said they expected the UK to have to borrow £72.2bn to balance the books in 2015-16. The actual deficit turned out to be £74bn.

To be fair to the OBR, it did say at the time it expected the deficit to be revised down as more data became available. This is a reasonable assumption, given that in the past six financial years the deficit has eventually been reduced by an average of £1.9bn. A repeat of that would leave the OBR’s £72.2bn forecast pretty much spot on.

So let’s give the OBR the benefit of the doubt about 2015-16. What are the prospects of it being right about the deficit coming down to £55.5bn in 2016-17? The economy is clearly slowing, as illustrated by the falls in retail sales in both February and March, and by the small increase in the jobless total.

Source: George Osborne's borrowing targets will be hard to meet | Business | The Guardian (http://www.theguardian.com/business/2016/apr/21/uk-borrowing-targets-george-osborne-budget-surplus)

After referendum he will go for his original plan to shaft pensioners with removal of tax reliefs for majority of those who save. That would fook up their future, but generate a lot of dosh in a short term.