Comment of the day: On borrowed time: shock deficit threatens UK recovery – by Francis Elliott and Gráinne Gilmore in the Times

Gordon Brown’s launch of a Labour election campaign promising economic recovery was in jeopardy last night as a record slump in tax receipts fuelled fears that Britain could slip back into recession.

Official figures showed that the Treasury borrowed another £4.3 billion last month. It is the first time since records began in 1993 that the nation has been in the red in January, traditionally the month when government coffers are swelled by big tax receipts.

Economists, who had expected a surplus of about £2.8 billion, sounded renewed alarm, with some saying Britain’s deficit could exceed Greece’s. Kate Barker, of the Bank of England Monetary Policy Committee, added to the gloom, warning the recovery would be “hesitant” and another quarter of negative growth was possible.

Treasury officials insisted that the Government remained on track to borrow a total of £178 billion, 12.6 per cent of GDP, as forecast by Alistair Darling in the last Pre-Budget Report. However, City experts said the figures showed that the deficit could overtake the 12.7 per cent recorded by Greece. Read in full in The Times.


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