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S&p Doubts Uk Deficit Target, Says More Tax Revenue May Be Needed

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http://uk.reuters.com/article/2014/12/12/uk-britain-ratings-s-p-idUKKBN0JQ1VH20141212

Ratings agency Standard & Poor's said on Friday Britain's public borrowing was likely to be higher than the government had forecast and the country might need to find ways to raise more tax revenue to balance the books.

Finance minister George Osborne has said he intends to balance Britain's budget over the coming years through spending cuts alone, a pledge which will be central to the campaign of Prime Minister David Cameron ahead of national elections in May.

But S&P, the only major ratings agency not to have cut Britain's AAA rating, said the tax base might eventually need to widen, whoever is in power after May.

"We expect that future consolidation may eventually look more to the revenue than the expenditure side," S&P said in a statement in which it confirmed it was maintaining a stable outlook for Britain's triple-A rating.

The ratings agency also said Britain's economy would suffer if it left the European Union, something Cameron has said he will put to a referendum in 2017 if his Conservative Party continues to hold power.

I don't think anyone seriously considers Osbornes tax revenue predictions as anything like accurate.

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But S&P, the only major ratings agency not to have cut Britain's AAA rating, said the tax base might eventually need to widen, whoever is in power after May.

They're only just starting to catch up.

Mind they're a "ratings agency" so it's no real surprise that they're well behind.

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Serial yearly deficits, overall debt climbing, yearly interest repayments (c. £35B currently?) climbing....the government HAVE TO either cut more or tax more or both. And....house prices will continue to rise....of course....of course.

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Tax revenues on north sea oil. Need I say more?

This is a curveball for hesitant eleccy car considerers (ie me). I've little doubt the collapse in front loaded receipts will simply be tacked on the other end via fuel duty. Very hard to avoid, and an obvious solution for mandarins.

Edited by Joan of The Tower

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There seems to have been a treasury release re a charter for deficit reduction. I have not checked the detail but it was along the lines of revisions to Osb' rules ( remember the old lots golden rule).

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