Christmas is coming, but there is little cheer in the British economy with recession looming. Tomorrow the government is expected to announce plans to borrow billions of euros to stimulate spending, and stop the economy from seizing up.
The headline measure will be a cut in value-added tax to 15 percent in a pre-Christmas present to shoppers.
The opposition accuses the government of recklessness, saying it is borrowing huge sums which would have to be paid back later. But in a speech to be given tomorrow, Prime Minister Gordon Brown will say failure to act will have dramatic consequences for Britain.
The Chancellor Alistair Darling will also scrap some increases in business tax and offer a helping hand to homeowners struggling with mortgages.
Brown’s handling of the financial crisis has given his party a boost in the opinion polls. An election is not due before May 2010, and Brown’s hopes of winning may rest on the coming recession being relatively short and shallow.