Government's fiscal plan 'achievable'
Feb 23 2011
Tax receipts exceeded government spending by £3.7 billion in January
A senior economist at the British Chambers of Commerce (BCC) is optimistic about the government’s fiscal forecasts for 2011.
Commenting on the public finance figures for January, where tax receipts exceeded government spending by £3.7 billion, David Kern, chief economist of the trade organisation says, ‘These figures are better than expected and suggest that the government’s fiscal forecasts for the current year are on course to be achieved and may even be exceeded.
‘They also support the BCC’s assessment that the economy is recovering in the current quarter after the temporary setback seen in the fourth quarter of 2010.’
However, Kern warns that the fiscal strategy can only succeed if the austerity measures are supplemented by effective policies that enable businesses to deliver growth and create new jobs.
‘On its part, the Monetary Policy Committee must support the recovery by postponing interest rate increases until the initial impact of the deficit cutting programme has been absorbed. And at the same time, the government must deliver radical proposals to support growth at the Budget on 23rd March,’ he adds.
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