Chancellor on course to hit targets

Graham_Devon

Seems strange to report that a government financial plan is actually working!

This really IS good news.

George Osborne's deficit-reduction plan received a boost when the latest official figures revealed that curbs on spending were reducing the hole in Britain's public finances in line with government forecasts.

After a run of disappointing economic news, the Treasury expressed pleasure at data from the Office for National Statistics showing that half the planned deficit reduction for 2011-2 had taken place in the first six months of the year.

The ONS said that between April and September net borrowing, excluding state interventions to prop up Britain's banks in the financial crisis, totalled £63.5bn, down from £71bn in the same period of 2010-11.

In the budget, the chancellor said that he expected the budget deficit using this measure to come down from £137bn to £122bn in the current financial year.

A Treasury spokesman said: "One year on from the spending review, and despite the global economic turbulence stemming from the crisis of confidence in the Eurozone, today's figures show the government's progress in delivering its deficit reduction plan. At the halfway point in the fiscal year, half of the fall in borrowing forecast for the whole year has been achieved."

http://www.guardian.co.uk/business/2011/oct/21/government-borrowing-september-budget-deficit

Degenerate

Of course, those figures have yet to factor in the reduced tax revenue and increased benefit bill that will result from the new recession that Georgie boy is determinedly driving us into.

A major GDP drop is pretty much inevitable anyway when the Euro crisis really reaches it's watershed moment and countries start dropping out, but it would be better to enter this in a position of relative economic strength, rather than already being in recession because the economically-illiterate fool at the helm of our economy thought that cuts generate growth.

grizzly1911

Do you really expect anything different from the ONS. A Treasury Spokesman says..... whatever he is told to if he wants a job.

Statistics, statistics.

Wonder what the trend is, I was under the impression (monthly snap shots) the gap was widening at present and likely to continue.

As degenerate says, falling revenues and increased benefit expenditure have yet to really hit.

Meanwhile we continue our slippery slide, perhaps if we had Stuart Hall doing the commentary it may lift our spirits.

Generali

What would be a better policy? Greece tried the 'spend all the money you can borrow' plan. That doesn't seem to be working out so well.

Thrugelmir

grizzly1911 wrote: »

Do you really expect anything different from the ONS. A Treasury Spokesman says..... whatever he is told to if he wants a job.

Didn't realise the ONS operated the countries finances.

IronWolf

Degenerate wrote: »

Of course, those figures have yet to factor in the reduced tax revenue and increased benefit bill that will result from the new recession that Georgie boy is determinedly driving us into.

A major GDP drop is pretty much inevitable anyway when the Euro crisis really reaches it's watershed moment and countries start dropping out, but it would be better to enter this in a position of relative economic strength, rather than already being in recession because the economically-illiterate fool at the helm of our economy thought that cuts generate growth.

The budget deficit is spending minus revenue, so how can you say tax revenue has to be factored in? it already is.

And noone cares what the deficit is as a % of GDP, all they care about is getting it to £0 (which regardless of what GDP is, is 0%)


Another blow to Ed Balls and the Labour morons....whats that, you cant cut to reduce a deficit? Oh we just did.....and so, incidentally, have Greece!

vivatifosi

Interesting, thanks Dev. From what I can see, the big savings from government spend have yet to come, as this year there are things like redundancy costs to factor in. Will be interesting going forward to see how the figures look in say a year from now.

heathcote123

Degenerate wrote: »

Of course, those figures have yet to factor in the reduced tax revenue and increased benefit bill that will result from the new recession that Georgie boy is determinedly driving us into.

A major GDP drop is pretty much inevitable anyway when the Euro crisis really reaches it's watershed moment and countries start dropping out, but it would be better to enter this in a position of relative economic strength, rather than already being in recession because the economically-illiterate fool at the helm of our economy thought that cuts generate growth.

Ah, so by 'relative economic strength' you mean by continuing to borrow even more money? - relative to Greece maybe?

These aren't cuts for the hell of it. They're cuts because if we don't make them we'll all collectively end up on the bankruptcy board.

As you are obviously not an 'economically illiterate fool' like George, please can you explain how continuing the spending 'plans' of the previous government will lead to greater prosperity & stability?

He's doing a thankless, difficult & unpopular job to clear up the mess that the truely clueless left behind. Once its cleared up the UK will be in a far better position to move forward. Unfortunately labour will probably get back in then & screw it up again.

Degenerate

Generali wrote: »

What would be a better policy? Greece tried the 'spend all the money you can borrow' plan. That doesn't seem to be working out so well.

More recently they've been trying the "grind your economy into dust with austerity" plan and their debt dynamics have been deteriorating further. GROWTH would be the better policy. In Greece's case their hands are tied by a half-baked currency system. Ours are not.

heathcote123 wrote: »

Ah, so by 'relative economic strength' you mean by continuing to borrow even more money? - relative to Greece maybe?

How about relative to Germany? Our national debt was still lower than theirs at the last count. It did look like we would overtake them, but the way bailout liabilities are piling up in the Euro-zone it's anyone's guess now.

These aren't cuts for the hell of it. They're cuts because if we don't make them we'll all collectively end up on the bankruptcy board.

That's just the Tory party line, it bears little relation to the truth. In reality, our borrowing costs had not significantly escalated. Our national debt/GDP has been much higher in the past and we haven't defaulted. We had room to maneuver.

As you are obviously not an 'economically illiterate fool' like George, please can you explain how continuing the spending 'plans' of the previous government will lead to greater prosperity & stability?

See above references to generating growth. The Labour plans were to cut the defecit too, but over a timescale that would allow the economy to recover first.

He's doing a thankless, difficult & unpopular job to clear up the mess that the truely clueless left behind. Once its cleared up the UK will be in a far better position to move forward. Unfortunately labour will probably get back in then & screw it up again.

He's on an ideological mission to shrink the state as much as possible, as fast as possible, whilst the need for it can still be blamed on the previous administration. His idiocy is that he believed his own hype. It seems he really thought that the private sector would pick up the slack and generate growth. There was no sound basis for this theory, and now it's been proved wrong. Few doubt we are heading back into recession.

IronWolf wrote: »

The budget deficit is spending minus revenue, so how can you say tax revenue has to be factored in? it already is.

I was referring to the impending effects of the coming recession.

And noone cares what the deficit is as a % of GDP, all they care about is getting it to £0 (which regardless of what GDP is, is 0%)

That one statement reveals such a profound lack of economic understanding I don't know what else to add. Is that you, George?

lvader

It's not all about the debt or the deficit, it's also the cost of the finance. At the moment the cost of finance is very low, below inflation infact.

Italy, Spain and maybe even Greece would be fine if they could borrow at the same rate as the US or Germany or the UK.

lvader

Degenerate wrote: »

That's just the Tory party line, it bears little relation to the truth. In reality, our borrowing costs had not significantly escalated. Our national debt/GDP has been much higher in the past and we haven't defaulted. We had room to maneuver.

The cost of the debt is dependant on the interest rate we pay, Italy and Spain pay nearly twice as much as us for their debt. That is why we needed to deal with the deficit as a matter of urgency. Labours plan is nonsense.