You are here: Home - Saving & Banking - News -

Report warns Government forecast may be tight

Written by:

The Treasury may have given insufficient weight to the risks of continued financial turbulence when forecasting economic growth in last month’s budget, according to a report from the Treasury Committee.

Published today, the report examines the budget announcement issued by Chancellor Alistair Darling on 12 March. The Committee revealed the Treasury’s growth forecasts were more optimistic this year than the average of independent forecasts and said the margin by which the Treasury forecasts that it will meet the sustainable investment rule is “extremely tight, especially considering the uncertainty surrounding the overall economic situation”. The sustainable investment rule was created by Gordon Brown in 1997 to keep public sector debt under control.

John McFall, chairman of the Treasury Committee, said: “The Treasury’s forecast of economic growth in the next two years is more optimistic than the consensus view. Critical to this forecast is the resilience of the UK economy to shocks. Some of the very things that have kept our economy growing over the last decade may start to cause us problems, and the 2008 Budget may not have recognised this fully.”

He added that the Government would have to be extremely vigilant in how it manages the public finances in order to “maintain its so far clean record in meeting its own fiscal rules”.

Related Posts


Tag Box

There are 0 Comment(s)

If you wish to comment without signing in, click your cursor in the top box and tick the 'Sign in as a guest' box at the bottom.

ISAs: your back-to-basics guide for 2018/19

Here’s everything you need to know to make the most of your unused ISA allowance ahead of the 5 April deadli...

A guide to Sharia savings accounts

A number of Sharia savings products have upped their game in recent months, beating more familiar competitors ...

Five ways to get on the property ladder without the Bank of Mum and Dad

A report suggests the Bank of Mum and Dad is running low on funds. Fortunately, there are other options for st...

What will happen if rates change

How your finances will be impacted by a rise in interest rates.

Regular Savings Calculator

Small regular contributions can build up nicely over time.

Online Savings Calculator

Work out how your online savings can build over time.

Having a baby and your finances: seven top tips

We’re guessing the Duchess of Cambridge won’t be fretting about maternity pay or whether she’ll still be...

Protecting family wealth: 10 tips for cutting inheritance tax

Inheritance tax - sometimes known as 'death tax' - can cause even more heartache for bereaved families. But th...

Travel insurance: Five tips to ensure a successful claim

Ahead of your summer holiday, it’s important to make sure you have the right level of travel cover or you co...

Money Tips of the Week

Read previous post:
FEATURE: The true extent of lost accounts

With thousands of people logging onto a website that helps unearth lost accounts, Barney McCarthy looks at how to trace...