The budget
Gordon Brown should take action to bring Britain's budget into balance in the medium term, the European Commission has warned, amid fears in Brussels that the chancellor's grip on public finances is loosening.
Joaquin Almunia, European Union monetary affairs commissioner, claimed Mr Brown's strategy also put Britain at risk of breaching the EU's deficit ceiling of three per cent of gross domestic product.
Government Response: Treasury
A Treasury spokesman said: "The
Party Response: Conservatives
Oliver Letwin, shadow chancellor, said: "This is an all too familiar story. Most independent economic forecasters now agree that the public finances are in worse shape than Mr Blair and Mr Brown would have us believe.
"The Institute for Fiscal Studies, the International Monetary Fund, the Confederation of British Industry, the Organisation for Economic Co-Operation and Development and a host of other respected bodies can't all be wrong. All have warned that the government is spending, wasting and borrowing so much that third-term Labour tax rises are inevitable if Mr Brown is to meet the 'golden rule'."
Sarah Winterton, director of Public Affairs at the BRC said: "The retail industry makes a significant contribution to the
"Until recently, consumer spending was the main driver of the economy. However, over the passed nine months retail sales growth has slowed and shoppers have become more cautious and selective in their spending, reflecting the impact of successive increases in interest rates and the slowing housing market.
"Cost increases have also had a bigger impact on retail businesses than other sectors and shop prices have been virtually static for seven years.
"The industry has been unable to offset unavoidable increases in the industry's cost base, including higher interest rates, two successive increases in the National Minimum Wage, higher national insurance contributions, and higher energy prices.
"The BRC urge the Chancellor to take action to ease this pressure of cost inflation on the
"Unchecked, the current and projected level of cost inflation will weaken the financial productivity of the industry and, therefore, its capacity to create jobs."
Discuss this article via video now
