The government will need to implement a further £350bn of tax rises and spending cuts, according to a report published today.
Roger Bootle, an economic adviser to Deloitte predicts Britain's public borrowing will rise to 15% of its gross domestic product this year, which is more than twice the level when the country sought support from the International Monetary Fund in the 1970's.
In contrast, the Treasury forecasts UK borrowings will reach only 12% of GDP this year. Mr. Bootle says that the Budget measures do not go far enough and Britain will need further "fiscal tightening" equivalent to 5% of GDP, or about £70bn per year over the course of the next five years.
However despite the gloomy prognosis there are signs that consumer confidence is on the rise. A survey by Nielsen published today says consumer confidence has risen to its highest level for 18 months.
The CBI has found that of Britain's small and medium-sized manufacturers, 40% of those surveyed claim orders had fallen in the three months to October, while 24% reported a rise, giving a balance of -17%. The previous quarter the figure was -34%.
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