Osborne tipped to announce public borrowing rise
Chancellor could be set to reveal a rise in the scale of its public borrowing
George Osborne is to increase the scale of the UK’s public borrowing in the medium-term, despite his persistent reiteration of the need for more fiscal tightening, according to reports.
The Financial Times insists that Osborne is to blame the “wrong kind of inflation” for forcing his hand on public spending in the medium term during his Budget announcement on Wednesday 22nd.
The chancellor is also believed to be lining up a series of measures that will target high-level tax avoidance, as well as a levy on the use of private jets among the super-rich.
High and rising inflation is squeezing the government’s overall budget, rather than increasing it through expanded tax revenues as is usually the case, Osborne is now expected to explain on Wednesday.
The Office of Budget Responsibility recently highlighted the potential for certain types of inflation to result in an impingement of public finances in the medium term and Britain is said to be facing just such conditions at present.
The latest reports on the state of Britain’s public borrowing prospects rather fly in the face of the suggestion from Ernst & Young’s ITEM Club this week that the Treasury is in line for an £8 billion “windfall” for the financial year.
Ernst & Young has counselled against any sort of “Budget giveaway” on Wednesday but it now looks as if the chancellor is planning certain sweeteners to lessen the country’s displeasure at what the ITEM Club calls the “bitter pill of fiscal retrenchment”.
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