The British Prime Minister will try to kickstart his failing economy by borrowing nearly 24-billion euros for extra public spending, to stop a recession turning into a slump. Gordon Brown told business leaders at the CBI in London that extraordinary times require extraordinary action.
“To fail to act now would now only be a failure of economic policy, it would also be a failure of leadership. Doing too little too late would mean more damage and more deterioration, the loss of vital successful businesses and it would mean a weaker economy, lower growth, eventually greater fiscal problems and in that event higher interest rates and higher taxes,” he said The finance minister, Chancellor Alistair Darling is unveiling a package which will include a 2.5 per cent cut in VAT and help for business, low earners and home owners. With house prices slumping, unemployment on the up and manufacturing output dropping, the stakes are high. But to pay for it all, higher salary earners are facing a sharp rise in tax – after the next election – and that would break a main promise which brought Labour back to power in the 1990s.