TaxPersonal TaxGovernment could raise taxes to cover £90bn borrowing rise

Government could raise taxes to cover £90bn borrowing rise

Credit crisis will cause huge rise in borrowing and possible income tax hike, experts predict

The state of the government’s finances are so perilous that it may have to
borrow £90bn next year and raise taxes.

Analysis by the Centre for
Economics and Business Research
predicts that borrowing this year will be
$63bn, well above the £43bn forecast by chancellor Alistair Darling, rising to
£90bn in 2009-10. To cover the shortfall, income tax would have to rise by 5p in
the pound.

Other research by
Capital Economics
predicts that Britain’s budget deficit, already the largest in the developed
world, will rise to £100bn by 2010-11, according to
The
Telegraph
.

Further reading

Government
needs to raise income tax by 5%

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