British budget deficits deteriorate further
Budget deficits in Britain have grown from 拢8.8 billion to 拢10.0 billion in the last year despite increased VAT tax revenue and positive projections.
Yeomen of the Guard in the Palace of Westminster, before the opening of Parliament in London, Tuesday. Amid a European economic crisis and major change in government, the British budget deficit is growing.
Matt Dunham-Pool/AP
The U.K. budget deficit continues to deteriorate, with .
The numbers are even worse if you consider that tax receipts were boosted by the VAT increase (VAT receipts increased 拢1.5 billion), and if you consider that the balance was according to the statistics bureau boosted by some one-time items.
Considering that other statistics indicates a recovery (albeit only a weak one) this is somewhat surprising. This suggests that either there were some other temporary factors which worsened the outcome but was unnoticed by the statistics bureau, or that the economic recovery may be illusory.
Particularly if the latter explanation is true, and this implies a continuing deteriorating trend, this makes the pledge by the incoming Conservative-Liberal Democrat government to undertake austerity measures all the more important. And it makes the recent rally in British government bonds somewhat puzzling, except as a vote of confidence in these future unspecified austerity measures (though it should be noted that specified austerity measures in other countries, particularly Greece but also Spain and Portugal has been met with a lot less enthusiasm).
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