Its UK Economic Outlook report published this week calculated that the budget deficit will increase to around £30bn in 2003/4 compared to a Treasury forecast of £24bn.
The report blames slower GDP growth and weaker tax revenues on a slower recovery in corporate profits, notably in the financial sector following recent equity market weakness. Considering intended NHS spend, it believes the Treasury will need to raise taxes.
It envisages that GDP growth will average around 2.25% in 2003 and around 2.5% in 2004, compared to the Treasury pre-Budget forecasts of 2.5% to 3% and 3% to 3.5% respectively. The report also argues that tax revenues are likely to remain weaker relative to GDP than the Treasury expects, due to a slower recovery in corporate profits, notably in the financial sector following recent equity market weakness.
Does Darwin's theory apply to taxation? Colin ponders...
The EC has been instructed to draft a European Union (EU) directive authorising an EU financial transaction tax, which would apply to ten of the EU’s 28 member states
Accountancy watchdog the FRC has dropped its investigation into the former chief financial officer of Tesco, nearly two years after the supermarket was engulfed in an accounting scandal
Colin imagines how Apple's logo might change in the wake of the EC's ruling over its Irish tax arrangements