So says the FT in an article published last night having replicated some economic models used by the ONS (Office for National Statistics)
The UK faces a black hole of more than GBP 20bln in the public finances, according to their findings and suggests that Britain might have to endure an extra year of austerity before the books are balanced.
While Britain has staged a remarkable recovery, indicators of the economy’s capacity for future growth have deteriorated. With unemployment falling quickly, the figures show that companies may have little room to expand production rapidly. A problem that Mr C and the BOE have been at pains to highlight recently
If the models are correct, the next government would have to announce new spending cuts or tax rises to eliminate the structural deficit and ultimately to run a surplus.
Just in case anyone out there was thinking George & Co had things sussed.
Read more at the FT here. Available on free sub if gated.
