Pre-Budget Report 2008: The return of hard times

David Heald

Research output: Chapter in Book/Report/Conference proceedingOther contribution

Abstract

This Treasury Committee report on the Pre-Budget Report 2008 considers that the balance of risks to the Treasury's forecast, for a swift recovery in economic growth for 2010 after a significant decline in output in 2009, is on the downside.

The report highlights the lack of bank lending as the single most critical problem for the economy in the near term. The overall effect of the fiscal stimulus remains uncertain, the cost of the reduction in VAT is considerable and, in the view of the majority of commentators, the Treasury's analysis of its impact is an optimistic one.

The report notes that the risk of a self-reinforcing deflationary cycle exists in the UK economy at present and recommends that the Treasury prepare and publish the actions it may consider taking should a period of 'quantitative easing' be needed.

While the need for lower interest rates to maintain economic growth is crucial at the present time, the needs of savers must not be forgotten and the Treasury should consider measures that will also support savers at this difficult time.

The report notes with concern that the Pre-Budget Report contains no policy measures which will significantly advance meeting the 2010 child poverty target.
Original languageEnglish
Title of host publicationPre-Budget Report 2008
Subtitle of host publicationHC 27, Second Report of Session 2008-09 - Report, Together with Formal Minutes, Oral and Written Evidence
Editors Treasury Committee of the House of Commons
Place of PublicationLondon
PublisherStationery Office (Great Britain)
PagesEv64-70
Number of pages7
ISBN (Print)9780215526113
Publication statusPublished - 28 Jan 2009

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