Tuesday, March 22, 2011
Wrong type of snow, leaves on the tracks, now we officially have â€œthe wrong type of inflationâ€
The Chancellor will be forced to admit in tomorrowâ€™s Budget that medium-term borrowing will be significantly higher than planned. The Financial Times reports that Budget forecasts to be released tomorrow will say â€œthe wrong type of inflationâ€ will squeeze Government finances and hit household incomes. The pressure on household incomes will mean income tax and National Insurance contributions will not rise as is usual in an inflationary environment while benefits and index-linked Government debt are automatically linked to inflation.