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The Business: Brown Is In Denial About Public Finances.

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'Brown 'is in denial' about public Finances':


Chancellor Gordon Brown will on Monday be accused of being in denial about the state of Britain's public finances by a leading economic think-tank.

The Ernst & Young Item Club, which uses the same economic model as the Treasury, will warn that the black hole at the heart of Brown's finances is continuing to grow and that economic growth will remain lacklustre this year.


The Item Club is forecasting economic growth of 2.3% this year, in line with Brown's Budget forecast of 2% to 2.5%, more than last year's 1.7% but less than the trend rate of growth. The Club expects interest rates to remain unchanged at 4.5%, at least until the end of the year, thanks to better than expected retail sales in December and a resurgence in house prices and mortgage lending but despite lower than expected consumer price inflation.


Public sector net debt, expressed as a percentage of gross domestic product (GDP), surged to 37.2% at the end of December, compared with 35.2% at end of December 2004 and a low of 29.5% in February 2002. This is becoming dangerously close to the 40% limit under Brown's fiscal rules.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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