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| Version 1 | Version 2 |
|---|---|
| Government borrowing 'to swell' | Government borrowing 'to swell' |
| (10 minutes later) | |
| The government has limited scope to implement its planned stimulus package as borrowing soars, according to a key economic think-tank. | The government has limited scope to implement its planned stimulus package as borrowing soars, according to a key economic think-tank. |
| The Ernst & Young Item club forecasts that net borrowing will rise to £180bn in the forthcoming tax year and will exceed the chancellor's own prediction. | The Ernst & Young Item club forecasts that net borrowing will rise to £180bn in the forthcoming tax year and will exceed the chancellor's own prediction. |
| It said that public finances were deteriorating "at an alarming rate". | It said that public finances were deteriorating "at an alarming rate". |
| It also called for a temporary cut in national insurance contributions to encourage businesses to hire staff. | It also called for a temporary cut in national insurance contributions to encourage businesses to hire staff. |
| On Thursday, the IMF said that the UK would have to borrow 11% of national income to battle the financial crisis - the highest of the G7 nations. | On Thursday, the IMF said that the UK would have to borrow 11% of national income to battle the financial crisis - the highest of the G7 nations. |
| The Item club says that figure was overly optimistic. It forecasts borrowing to stand at 12.6% of GDP next year and that the UK would be running deficits over the next decade. | The Item club says that figure was overly optimistic. It forecasts borrowing to stand at 12.6% of GDP next year and that the UK would be running deficits over the next decade. |
| Borrowing binge | Borrowing binge |
| The Item club, which uses similar methodology as the Treasury forecasters, said that predictions by the chancellor, Alistair Darling, in last November's pre-budget report had been overtaken by events. | |
| Total borrowing over the next five years would be £270bn higher than anticipated, it said. | |
| The forecasters blamed the parlous public finances on falling tax revenues as a result of lower consumer spending and rising unemployment. | The forecasters blamed the parlous public finances on falling tax revenues as a result of lower consumer spending and rising unemployment. |
| "The chancellor must provide some credible forecasts for the public finances and present an unambiguous medium-term plan for restoring them to health, " said Peter Spencer, chief economic advisor to the Item club. | "The chancellor must provide some credible forecasts for the public finances and present an unambiguous medium-term plan for restoring them to health, " said Peter Spencer, chief economic advisor to the Item club. |