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| Version 2 | Version 3 |
|---|---|
| UK faces slow economic recovery | UK faces slow economic recovery |
| (20 minutes later) | |
| A leading think-tank is predicting it may take another five years for income per head to return to the level it was before the recession hit in early 2008. | A leading think-tank is predicting it may take another five years for income per head to return to the level it was before the recession hit in early 2008. |
| The National Institute of Economic and Social Research (NIESR) sees total UK GDP falling 4.3% in 2009 before growing 1% in 2010 and 1.8% in 2011. | The National Institute of Economic and Social Research (NIESR) sees total UK GDP falling 4.3% in 2009 before growing 1% in 2010 and 1.8% in 2011. |
| This echoes earlier NIESR forecasts but suggests a slower rate of recovery. | This echoes earlier NIESR forecasts but suggests a slower rate of recovery. |
| Regarding debt, the organisation predicts public borrowing to reach more than £120bn over the next four years. | Regarding debt, the organisation predicts public borrowing to reach more than £120bn over the next four years. |
| The research body sees income per head - GDP per capita - taking until March 2014 to return to the level it was in the first quarter of 2008, when the recession kicked in. | The research body sees income per head - GDP per capita - taking until March 2014 to return to the level it was in the first quarter of 2008, when the recession kicked in. |
| 'Credible plan' | 'Credible plan' |
| "The introduction of a more credible plan to return the public finances to a path of fiscal sustainability remains a necessity," NIESR said. | "The introduction of a more credible plan to return the public finances to a path of fiscal sustainability remains a necessity," NIESR said. |
| On unchanged policy, the NIESR thinks the government would be borrowing more than £60bn more in 2013-14 than it currently expects. Stephanie Flanders, BBC economics editor Read Stephanie's blog | |
| And assuming the government keeps to tax plans set out in the Budget, NIESR sees public borrowing hitting £165.7bn in 2009 - or 12% of GDP. | And assuming the government keeps to tax plans set out in the Budget, NIESR sees public borrowing hitting £165.7bn in 2009 - or 12% of GDP. |
| Even taking into account "more aggressive curtailing" of public sector spending, this figure would remain at £121.6bn in 2013/2014. | Even taking into account "more aggressive curtailing" of public sector spending, this figure would remain at £121.6bn in 2013/2014. |
| The research body predicts heavy cuts in spending in addition to a rise in taxes over the following four years, to mitigate the significant debt | The research body predicts heavy cuts in spending in addition to a rise in taxes over the following four years, to mitigate the significant debt |
| Recently-released data shows total outstanding government debt in the UK has hit a record £799bn, or 56.6% of UK GDP - the highest since records began in 1974. | Recently-released data shows total outstanding government debt in the UK has hit a record £799bn, or 56.6% of UK GDP - the highest since records began in 1974. |
| Lower tax receipts as the economy shrinks put new borrowing in June at £13bn, almost double the same month as a year before. | Lower tax receipts as the economy shrinks put new borrowing in June at £13bn, almost double the same month as a year before. |
| Squeeze | Squeeze |
| "With the rapid accumulation of debt under way, debt interest payments are also expected to increase as a share of GDP over the next few years" said NIESR. | "With the rapid accumulation of debt under way, debt interest payments are also expected to increase as a share of GDP over the next few years" said NIESR. |
| "This suggests that spending on goods and services by the state will have to be squeezed significantly". | "This suggests that spending on goods and services by the state will have to be squeezed significantly". |
| The think-tank sees the economy as a whole returning to the level it was in 2008's first quarter, before the downturn hit, in 2012. | The think-tank sees the economy as a whole returning to the level it was in 2008's first quarter, before the downturn hit, in 2012. |
| And like other forecasters, NIESR sees unemployment rising until mid 2011, peaking at 9.3%. | And like other forecasters, NIESR sees unemployment rising until mid 2011, peaking at 9.3%. |
| On Friday, the UK's GDP figures for the second quarter will be released. | On Friday, the UK's GDP figures for the second quarter will be released. |