Perspectives on the UK chancellor's pre-budget report
BVCA gives cautious welcome to Pre Budget Report The British Venture Capital Association (BVCA) welcomes the Chancellor's emphasis on entrepreneurship. As we have said, we are calling on the Chancellor to rule out any further increases in business taxation or any new imposition of regulation on business.
We remain concerned that increasing levels of public borrowing should not undermine confidence in the economy or lead to any further increases in interest rates.
Norman Cowen, Wilder Coe Business Recovery
So far, under Chancellor Gordon Brown's stewardship, the British economy has grown annually at around three per cent. The reason, despite shrinking manufacturing capacity, has been the strength of the pound against the dollar and euro together with low interest rates. Above all, since the war, an unknown low inflation rate of around two per cent.
Mr Brown thinks that his golden rule, which calls for the balance of tax revenues less non-investment spending, has worked? He predicts that the current budget deficit of £10.5bn will fall to £5bn in 2005-6. But no one knows how close to full capacity the UK economy is.
The Office for National Statistics has revealed that Public sector net borrowing hit a £751m deficit in October, compared with a predicted £1.1bn