KPMG predicts focus on economic forecasts in PBR

Chancellor Alistair Darling’s second pre-budget report will be vastly
different from his first, focusing on economic forecast and projections for
government finances,
KPMG predicts.

‘As tax revenues decline and rising unemployment boosts spending, the
chancellor is being forced to re-write the fiscal rules to accommodate higher
annual deficits and raise the ceiling on total public debt,’ Andrew Smith, KPMG
chief economist in the UK, said.

‘He will be treading a fine line between building-in enough leeway to
ameliorate the worst effects of the downturn, while reassuring the markets that
the public finances will be brought back onto an even keel once the economy

Sue Bonney, KPMG Europe head of tax, said: ‘The corporate tax world is
waiting for the next development on the changes to the way that foreign profits
are taxed and we’d expect to see something on this in the pre-budget report…
new restrictions on interest expense are likely before the end of the year and
could be unveiled in the pre-budget report.’

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