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Realistbear

Gordon Has Been Rumbled As He Breaks Both His Budgetary Rules

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http://www.iii.co.uk/news/?type=afxnews&am...;action=article

LONDON (AFX) - Chancellor of the Exchequer Gordon Brown may well have to rein in spending by more than anticipated in the years ahead, analysts said after another poor set of public finance data.
They also noted that a more parsimonious Treasury could well affect the earnings of a wide range of companies that have become increasingly dependent on government contracts over the last few years as spending has been ratcheted up, particularly within health and education.
"On current trends, the Chancellor is set to break both his budgetary rules unless he can raise more tax revenue or bring public spending under control," said Douglas McWilliams, chief executive at the Centre for Economic and Business Research.
Given the difficulties the government has in raising taxes in a world of capital mobility, McWilliams said Brown may well focus more on the spending side. If so, he said it would be sensible to mark down the shares of those companies with a heavy dependence on public sector contracts.
Earlier, the Office for National Statistics revealed that public sector net borrowing, the government's preferred measure of the public finances, rose to a record for June of 7.3 bln stg. That's up on last year's equivalent of 6.2 bln stg and expectations of a much more modest rise to 6.5 bln.
For the fiscal year ending April 2007, Brown expects an improvement in PSNB to 36.0 bln stg from 39.2 bln for the year ending April 2006.
With three months gone, analysts say it's touch and go whether Brown will meet his borrowing target this year. Over the first three months of the fiscal year, public sector net borrowing totaled at 16.4 bln stg, up from 13.0 bln stg last year
Geoff Dicks, economist at the Royal Bank of Scotland, said PSNB has come in above the year-earlier out-turn in every month since January.
"That is beginning to look like a trend," he said.
If that happens, then Brown will find it more difficult to meet his self-imposed fiscal rules of balancing the budget, excluding investment, across the economic cycle, and keeping debt below 40 pct of GDP. Net debt at the end of June stood at 478.6 bln stg, which is equivalent to 37.6 pct of GDP. That is the highest rate since December 1999's 38.0 pct.
Analysts added that initial analysis suggests that the Treasury is not reaping as many revenues as expected while spending does the opposite.
Brown has already said the next three-year Comprehensive Spending Review next summer will be different from those since Labour came to power in 1997. Except for health and education, most government departments are expected to see their allocation stay the same, which in real terms, means a cut....../

I wonder if he will tender his letter of reignation on Monday? No--he will just move the goalposts a little further out and blame the geo-political situation.

Edited by Realistbear

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parsimonious Treasury could well affect the earnings of a wide range of companies that have become increasingly dependent on government contracts over the last few years

Idiots have been bleating on about how many jobs Gordon has created. Now we see the truth. Gordon's Miracle jobs are nothing more than parasitic private companies living off tax payers money. Meawhile, between one and two million real jobs in industry have been destroyed.

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Idiots have been bleating on about how many jobs Gordon has created. Now we see the truth. Gordon's Miracle jobs are nothing more than parasitic private companies living off tax payers money. Meawhile, between one and two million real jobs in industry have been destroyed.

.....and more are going as once loyal British subjects get the hell out.

There's a double-whammy here for the British private sector worker: The government won't protect our jobs from unfair competition but why doesn't this apply to public sector jobs? How many public jobs have the government shipped overseas? I want to see all these useless overpaid public sector jobs shifted overseas and let's see how the unions respond.

Since '97 we have just been taxed more to create worthless jobs, pay public sector workers' pensions whilst watching our own pensions dwindle and our jobs shipped to Bangalore. Mortgage loans are rising because people aren't able to make their pay go around; MEW is a form of self-charity.

Edited by Xurbia

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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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