Despite increasing government debt, the Eurozone crisis and the looming threat of a recession, Britain, along with Canada and Germany are the only three countries of the top seven industrialised developed countries to keep its stellar AAA rating from the major credits rating agencies.
The numbers are looking good. The Office for National Statistics reported that since December, public spending excluding the bailout fell to 13.708bn well below the forecast of 14.9bn making the total fiscal year's borrowing 103.289bn, which is 11bn than the previous year.
The government should be on track to meet its goal cut in borrowings at 127bn down from 137.6bn the previous year. The Office for Budget Responsibility, an independent body that provides fiscal forecasts for the government has also indicated that it expects the targets to be achieved.
So far, so good. Unfortunately, while these results are encouraging on paper, but there are a lot of issues that might only show up as problems a few months later or might threaten the progress the Chancellor has been making in balancing the books.
There is the slow growth that will reduce tax revenue and increase benefits claims. Official reports show that Britain's economy shrank .01% in the beginning of the year and most economists expect it to shrink further over the next few months.
There is of course, the Euro crisis, which could further push back the government's plans to achieve financial stability. A recession resulting from the crisis could also damage Britain's AAA rating, not because of a drop in output but because of the overall rise in borrowings and loans. And this could bring the country under scrutiny. Data reports in January showed that the public sector debt has gone up to 1.004 trillion in December, the highest since the records began in 1993.
The numbers are looking good. The Office for National Statistics reported that since December, public spending excluding the bailout fell to 13.708bn well below the forecast of 14.9bn making the total fiscal year's borrowing 103.289bn, which is 11bn than the previous year.
The government should be on track to meet its goal cut in borrowings at 127bn down from 137.6bn the previous year. The Office for Budget Responsibility, an independent body that provides fiscal forecasts for the government has also indicated that it expects the targets to be achieved.
So far, so good. Unfortunately, while these results are encouraging on paper, but there are a lot of issues that might only show up as problems a few months later or might threaten the progress the Chancellor has been making in balancing the books.
There is the slow growth that will reduce tax revenue and increase benefits claims. Official reports show that Britain's economy shrank .01% in the beginning of the year and most economists expect it to shrink further over the next few months.
There is of course, the Euro crisis, which could further push back the government's plans to achieve financial stability. A recession resulting from the crisis could also damage Britain's AAA rating, not because of a drop in output but because of the overall rise in borrowings and loans. And this could bring the country under scrutiny. Data reports in January showed that the public sector debt has gone up to 1.004 trillion in December, the highest since the records began in 1993.
About the Author:
Priyanka Zaveri is a freelance writer, online marketer and SEO consultant. Priyanka writes for many online publications, as well as developing content and articles for a variety of well-established websites. Her latest project is writing informative articles on the subject of fast cash loans and instant payday loans for the reputable online agency Ferratum UK.
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