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| Version 2 | Version 3 |
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| Government borrowing 'to swell' | Government borrowing 'to swell' |
| (about 4 hours 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". |
| Shadow chancellor George Osborne called it "the worst fiscal mess any British government has created in peacetime". | |
| The Item club also called for a temporary cut in national insurance contributions to encourage businesses to hire staff. | |
| Mr Osborne told BBC Radio 4's Today programme: "One of the problems at the moment is that tax receipts have collapsed but we also need to look at the spending side of the organisation." The chancellor must provide some credible forecasts for the public finances Peter Spencer, Item club | |
| He added that there was "a great deal of scope for spending restraint", particularly among Whitehall civil servants. | |
| 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. |
| 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. | 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. | 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. |