With government expenses witnessing a speedy increase and tax receipts coming through much weaker, the UK’s public assets clocked well below the expected numbers in January. The arrears in the country’s public sector now stand at 59.5% of the country’s total Gross Domestic Product (GDP).
The chief of the UK trading desk at Travelex, Mark Bolsom admitted that the numbers are pretty ordinary and that they defy the economic reality of Chancellor Darling’s predictions. He termed the chancellor’s estimations as overtly bright, given UK’s cautious economic revival. The steadily increasing unemployment claims also seem to be stopping the tax receipts from being recovered faster.
The numbers, according to Bolsom, might support the theory calling for full-blown spending reductions in the public sector, thus shunting growth. Irrespective of the general election results, Bolsom expects UK to experience a period of economic severity.
News of the poorly performing public sector seems to have hit the Sterling badly, as the currency hit a session minimum. Sterling went down from $1.5620 to $1.5597, when compared to the dollar and from 86.80 pence to 87.05 pence against the euro levels.
