Brown set to break Golden Rule
Poor public finance figures could force Chancellor Gordon Brown to break his Golden Rule of borrowing only to invest and not to fund current spending.
Weaker than expected tax revenues in September meant the government borrowed £4.8billion last month.
Economists claim that unless tax revenues rebound quickly during the rest of the year, the Chancellor will have to borrow more than his Budget projection.
The Chancellor predicted that the government would borrow £33billion over the 2004/05 financial year, but already almost £23billion of this has been used.
One estimate from the Ernst&Young ITEM Club predicted that Brown could exceed his borrowing forecast by £6billion.
This has led to speculation that taxes may rise next year.
However, the Treasury remained defiant and said it was ‘on track’ to meet its fiscal rules.