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Last updateMon, 20 Feb 2017 9am

 

UK budget deficit estimated to be £40bn in 2020

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By 2020, the government will be forced to report a £40bn deficit instead of the planned £10bn surplus, according to a report by City University.

Economist’s Richard Murphy and Professor’s Ronen Palan study suggests that George Osborne could be forced to borrow billions of pounds more than forecast by 2020 if he sticks with spending cuts that will hit economic growth.

As reported by The Guardian, the two academics believe that the Treasury has underestimated the impact of welfare and departmental spending cuts on the broader economy and especially cuts to public sector investment.

“The very low multiplier the Treasury uses assumes that cuts in government spending will stimulate growth. That’s an assumption, and not a fact,” says Murphy.

Through their study, they suggest a boost to public infrastructure in order to keep private sector businesses from limiting their own investment plans, which would lead to lower productivity and depressed GDP growth over the next four years. 


Former Tory treasurer to donate £1m to Brexit campaign

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Former Tory party co-treasurer Peter Cruddas is to donate £1m to the Vote Leave campaign in the EU referendum. His donation would be the highest donation the Out cause has received.

According to the former co-treasurer, the referendum was the biggest political event in a generation.

“There are windows in history whereby the British public decide what they want and it’s outside the control of politicians. This is one of those events”, said Cruddas.

“We are confident we will raise that. There are some big businesses, big business names that are with us, but they haven’t declared yet,” said Cruddas to The Financial Times. He has predicted that the Vote Leave would spend close to £20 by the time votes are cast. 

Brexit won’t affect London’s access in Europe

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A possible Brexit would not undermine the City of London’s’ access to Europe, according to UBS chairman, Alex Weber.

Weber, former head of the central bank of Germany, Bundesbank, told The Telegraph that London would still enjoy access to Europe even in the case of a Brexit.

"If the UK were to leave the EU I think there would be two or three years of heightened uncertainty but pretty much the same rights,” says Weber.

As reported in The Telegraph, the City of London is widely seen as pro-EU because it fears losing access to European markets, a fear Weber believes in misplaced. Rival business groups are arguing over the relative merits of leaving or remaining in the EU. 

Summer budget 2015 - how the papers covered it

For finance directors, the summer budget ushered in a lowering of corporation tax from 20% to 19% and raised eyebrows over unexpected changes to pensions. The majority of the national papers focused on the increase in the minimum wage, but what else did they have to say? 


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