Head of Economic Research Adam Memon wrote for City A.M., responding to the question “As public borrowing remains high, is Osborne’s failure to tackle the deficit a cause for concern?”, Monday 24 November 2014.
Adam answered no:
“The phrase “don’t panic” doesn’t usually elicit much confidence. But while deficit reduction is happening more slowly than everyone would want, there really is no cause for panic yet. Public sector net borrowing in October fell £200m to £7.7bn compared to a year before and, although there has been an increase in the current budget deficit of £500m in the year to date, this has coincided with a £3.2bn increase in net public investment. Income tax revenues are down 0.4 per cent compared to the same period last year, but there should be a boost in revenue in January from self-employed workers. Furthermore, weak income tax revenues are a price worth paying, at least in the short run, because it is partly the result of strong employment growth among younger workers. There is clearly a lot still to do, but we should wait until the Office for Budget Responsibility’s updated forecasts at the Autumn Statement to analyse the outlook for spending.”
To read the full debate, visit the City A.M. website.
Date Added: Monday 24th November 2014