While offering strong support for the Bank of England’s monetary policy, the IoD said the Treasury needed to change the direction of its fiscal policy.
A negative balance of IoD members thought the Treasury’s conduct of fiscal policy was ‘unfavourable’ towards business.
The IoD said that between 1997 and 2006 it estimated the tax burden to rise by almost 5% of GDP ‘or £50bn in today’s prices’. It said UK public spending to GDP ratio was heading towards European, not American levels.
‘As a result of this tax and spend fiscal policy the long-term GDP growth rate is likely to be reduced by 0.25 percentage points,’ said Graeme Leach, chief economist at the IoD.
He added: ‘In 2000 the public spending to GDP ratio was 9 percentage points lower in the UK, than in the EU. The prospect of this huge gap being closed in little more than a decade is very worrying. It won’t make the UK economy the sick man of Europe, but it will make it pretty sickly in comparison with the recent past.’
Mark McMullen joins the private client services team from Smith & Williamson
Merger between Clear & Lane Chartered Accountants and Magma Chartered Accountants was finalised on 3 February
BDO has taken its new partner intake to 23 during the first half of its financial year, including the appointment of five partners in five weeks
The firm reports 7.6% global fee income growth for the year ending 31 December 2016