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UK deficit 'black hole' report


UK deficit 'black hole' report


An analysis by the Financial Times says the UK’s structural budget deficit will be 12 billion pounds more than estimated next year, that is 13.8 billion euros.

That would be very bad news for Britain’s finance minister George Osborne as his financial targets call for the elimination of that shortfall between revenue and spending by 2016.

However Britain’s Business Secretary Vince Cable rejected the FT’s figures saying, in a radio interview that he doesn’t recognize those figures.

Cable also said that an independent banking commission’s report calling for banks to separate their retail and investment arms must be put in place, and the Bank of England needs to relax monetary policy to help stimulate demand.

Speaking at the annual conference of his Liberal Democrat party in Birmingham, Cable said: “The commission’s key findings – to separate retail and casino banking – must be put in place.”

He said the British economy faced a lack of demand and called on the Bank of England to assist: “A lot of responsibility rests on the Bank of England to relax monetary policy further linked to small business lending.”

Earlier at the conference, the business secretary called for British companies to be required to publish more details on the pay packages of top bosses under a government drive to fix a “disconnect” between remuneration and corporate performance.

Pay at the top of Britain’s biggest companies has soared in recent years while salaries for workers have barely kept pace with inflation, a politically sensitive issue while the coalition pursues a tough deficit-cutting austerity programme.

“The disconnect between pay and long-term performance suggests that there is something dysfunctional about the market in executive pay or a failure in corporate governance arrangements,” Cable said. “We want to explore what is causing it and how it can be addressed,” he added.

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