UK Economy and more in the latest things that make you go hmm
How quickly we forget. Great weekend reading in the latest Things that make you go hmmm, by Grant Wiliams.
“While other countries struggle to command confidence in their fiscal forecasts we have created an internationally admired and respected independent office for budget re- sponsibility. These bold steps have made Britain that safe haven in the sovereign debt storm…”
– George Osborne, UK Chancellor of the Exchequer, August 11, 2011
Not only are there NO spending cuts within the UK Budget projections for the next five years, annually through the year 2017 …
… UK government spending will increase, every year, including an expansion of +2.8% scheduled to be implemented this year.
The UK government is ‘banking on’ growth in Revenue that will exceed the rate of growth in Expenditures, including growth of +3.5% cooked-into-the-books for this year.
But, the margin for error is slim, with year- over-year Revenue forecast to grow by more than the growth in year-over-year Spending, by a mere £1.4 billion.
Over the next five years things get even more interesting.
In order to ‘support’ a sizable EXPANSION in SPENDING over the next five years (pegged at +12.7%), the UK Treasury is RELYING on an astronomical rise in Revenue over that same five year period, pegged at +33.4%.
Revenue is forecast to rise by +£184.2 billion over the next five years, or by nearly +£40 billion per year.
Ahem, excuse me … perhaps the UK Treasury overlooked the FACT that Revenue in Febru- ary, pegged at £38.631 billion was (-) 1.9% BELOW the year-ago February revenue of £39.381 billion.
A decline of nearly £1 billion is FAR from the projections calling for a near +£40 billion per year increase over the next five years.
Full Hmmm Mar 25 2012 report.