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George Osborne to borrow more in 2013 as plans to cut deficit are blown off course

by: IFAonline
  • 07/02/2013
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George Osborne to borrow more in 2013 as plans to cut deficit are blown off course
George Osborne will be forced to borrow more money this year than last as his plans to cut the deficit are blown wildly off course, an influential report has warned.

The highly-respected Institute for Fiscal Studies said government borrowing will rise from £121.4bn in 2011-12 to £125.4bn in 2012-13, reports the Daily Mail.

The grim prediction was a bruising setback for the Chancellor just a month after he insisted the deficit would fall again this year – albeit only to £120.3bn.

‘There is a greater than 50-50 chance that the government will borrow more this year than it did last year,’ said the IFS in the Green Budget, its annual health check on the national finances.

An increase in borrowing would be a major embarrassment for Osborne who has consistently sought to deflect criticism from shadow chancellor Ed Balls by insisting the deficit is falling.

In a further setback, the IFS said the government will borrow £180bn more than originally planned over the next three years – including £52bn more in 2013-14 and £64bn more in both 2014-15 and 2015-16.

But the Chancellor was urged to stick to his guns by the Organisation for Economic Co-operation and Development as he battles to wipe out the record deficit racked up by Labour.

Angel Gurria, of the Paris-based group, which represents the world’s most powerful economies, said the Osborne plan was ‘flexible’ and ‘appropriate’ and had gained ‘priceless’ credibility around the world.

 

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