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Business

Budget 2015

Reaction from John Longworth, Director General and David Kern, Chief Economist at the British Chambers of Commerce
The recent surge in tax receipts will also help the government meet its borrowing and debt targets

John Longworth said: “The recent budget recognises both short-term electoral horizons and long-term economic needs. The Chancellor’s focus on business growth and prosperity will receive a warm welcome from businesses of all sizes.

“Businesses in every corner of the UK want more sustainable public finances, and they also want governments to take steps to support growth.

Once again, it appears that the Chancellor has pulled off a difficult balancing act, maintaining fiscal discipline while ensuring that necessary deficit reduction doesn’t undermine the UK’s growth prospects.

“Lower business taxes, allowances for investment, and targeted support for sectors, regions and small companies all contribute to confidence, investment and job creation.

“Yet the Chancellor avoided the temptation to use newfound windfalls for gimmicks. His focus on fiscal responsibility will play well with business audiences.”

Commenting on the latest Office for Budget Responsibility forecast, published today in conjunction with Budget 2015, David Kern, Chief Economist at the British Chambers of Commerce (BCC) said:

“The latest OBR forecast is good news for the British economy. Compared to the last forecast, growth is stronger, inflation is lower and the speed of debt reduction is likely to be faster. These improvements highlight that despite a weak patch in the final months of 2014, the economy is showing renewed momentum. The recent surge in tax receipts will also help the government meet its borrowing and debt targets.

“The OBR’s GDP forecast, although higher than in December, is still too cautious and lower than our own economic forecast.

“In spite of their greater optimism about economic growth, we believe the OBR’s forecast for public finances is a little too optimistic. While the fiscal target for this financial year may be met or even exceeded, progress in subsequent years will be slower, as the ability of the UK economy to generate tax receipts is diminished over time. We expect the economy to return to surplus one or two years later than the OBR predicts.”

 

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