While it is not unusual for a government to run up debt more recently government debt had become a political issue, in 2008 the then shadow chancellor George Osborne warned of excessive debt
"We are in danger, if the government is not careful, of having a proper sterling collapse, a run on the pound."This became a political plank and the newly elected govt set out to implement their policy of fiscal austerity. As their policy bit in GDP also slipped, hence the recent uptick in the debt ratio. Manufacturing was the the big hope for the recovery of the private sector but..
Dec. 1 (Bloomberg) -- U.K. manufacturing shrank at the fastest pace in 2 1/2 years in November as both domestic and overseas demand weakened..
..The U.K.’s Office for Budget Responsibility cut its 2012 economic growth forecast to 0.7 percent from 2.5 percent this week.The govt has been advised to go easy on the taxpayer
The National Institute for Economic and Social Research (NIESR) urged George Osborne to rethink his austerity programme and to use targeted tax cuts to boost demand, as a "meaningful recovery" continues to elude the economy..
..the thinktank forecast that household incomes, which fell last year by 0.8% – the first drop since 1981 – would drop by a further 1.1% in 2011. "Wage growth has failed to keep up with an elevated rate of inflation and tax increases," it said.It seems counterintuitive to expect an economic recovery to be meaningful if it is to be funded by taxpayers, who are running out of cash and the unemployed, who pay no tax at all.
