Britain’s huge budget deficit is a cause of concern as outlined by leading economists. The £178 billion budget deficit has raised alarms and the group wrote the letter to The Sunday Times which was signed by four former members of the Bank of England’s monetary policy committee.
A group of eminent academics and policy-makers put their names in an open letter urging that government borrowing had to be reduced more quickly than Chancellor Alistair Darling has set out. “The exact timing of measures should be sensitive to developments in the economy, particularly the fragility of the recovery, as per the group statement “However in order to be credible, the government’s goal should be to eliminate the structural current budget deficit over the course of a Parliament, and there is a compelling case all else equal for the first measures beginning to take effect in the 2010/11 fiscal year.”
The group believes the deficit reduction should come from cuts in public spending and that any tax increases should be broad-based and called for a strict & independent monitoring of the government’s performance against its fiscal goals. The group also laid out a warning for the government as they believe government is putting national economic recovery at risk without a credible plan for cutting its massive budget deficit.