The Great Debate UK
- Anthony J. Evans is assistant professor at ESCP Europe business school. He will participate in a Reuters pre-budget live blog on Dec. 9, at 12 p.m. British time. The opinions expressed are his own. -
The main issue underpinning Britain’s next pre-budget report is the state of the public finances. Let’s be clear – they’re dire.
The budget deficit may well exceed 200 billion pounds this year, contributing to a net public debt of over 800 billion pounds (i.e. 60 percent of GDP).
Some credit rating agencies have already cast doubt whether UK gilts can maintain their triple-A status, but if investors do turn their back on government debt there’ll be little advanced warning – this possibility needs to be anticipated, and acted upon, now.
Though it’s a cliche to say that a budget is eagerly awaited you can be forgiven for saying so this time around. This year all eyes and ears will be focused on the Chancellor’s economic figures and forecasts. The big question is how will he balance the books – cut public spending or raise taxes? In the run up to an election cuts are ideal but needs must. What will it mean for personal finances?