King wants to reduce public borrowing
July 28, 2009
The Governor of the Bank of England, Mervyn King, has recently spoken out stating that he wants to see the government put greater effort into reducing public borrowing.
Whilst there were proposals that had been outlined in the budget to try and cut public borrowing the governor of the central bank stated that they were not clear enough, and that the government needed to show ‘greater ambition’ in cutting levels of public borrowing.
Mr King said that he was very uncertain with regards to whether the UK would make a quick recovery from the recession, although there have been a variety of reports that have claimed that the recession has now hit its worst and things will start to recover.
Mr King was speaking before the Treasury Select Committee along with other Bank of England officials several weeks ago when he made reference to his concerns over public borrowing.
He went on to state that the speed at which the UK recovered from the financial crisis was partly dependant on how quickly public borrowing levels could be cut.
He stated: “The scale of the deficit is truly extraordinary. 12.5% of GDP is not something that anybody would have anticipated even a year or two ago, and this reflects the scale of the global downturn.”
He went on to state: “But it also reflects the fact that we came into this crisis with fiscal policy itself on a path that wasn’t itself sustainable and a correction was needed. There will certainly need to be a plan for the lifetime of the next parliament, contingent on the state of the economy, to show how those deficits will be brought down if the economy recovers to reach levels of deficits below those which were shown in the Budget figures.”
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