'No serious hole' in government finances
The governor of the Bank of England has come out in defence of chancellor Gordon Brown's handling of the country's economy, saying government finances are in a healthy state.
Eddie George, in an interview on the BBC Breakfast today, did not deny a black hole was developing, but said it was not a ‘serious’ one.
His statement came in response to comments made by influential groups such as Ernst & Young’s ITEM club, which said a £7bn deficit in public finances – the result of increased public spending and lower tax receipts – would lead to tax increases.
But George said: ‘I think our finances are in much better shape than most other countries in the world.’ He claimed UK debt was exceptionally low by international standards.
The state of the UK economy will be revealed when the chancellor delivers his pre-Budget speech on 27 November.