Brexit Disrupted George Osborne Effort to Balance the Budget
Chancellor of the Exchequer George Osborne face a hurdle in fulfilling his last year's ambition to eliminate budget deficit by 2019.. His economic plan is obstructed by Brexit issue and economic slowdown.
In February last year, Institute for Fiscal Studies mentioned that Osborne has boxed himself in, with an ambitious target to eliminate budget deficit by 2019–20. Afterward, he planned to continue running budget surpluses.
This time, according to Business Insider, Simon Wells and his team at HSBC also supported the theory that Osborne is "boxed in." While Osborne pledged to meet his £10 billion ($14 billion) surplus target by 2020. However, a worsening economic backdrop does not support his plan right now.
It will be hard for government under Prime Minister Cameron to fulfill promises to triple lock the pension. Which means to rise pension at the pace of wage growth or faster, to protect pensioners. Osborne also promised to cut public spending and to not raise taxes.
Chancellor of Exchequer is set to announce the budget next week, scheduled on March 16. However, Wells and HSBC warned this year's budget will become a delicate one for for Chancellor George Osborne as the economic backdrop has worsened. Slowing down economy, lower than expected GDP has added more complexities to the budget plan.
Brexit has been another pressing issue which lead the economy of UK slowing down at faster pace, according to Jeremy Warner, one of Britain's leading business and economics commentator. In his column in The Daily Telegraph, he wrote, "Only six months ago, things were going swimmingly for the Chancellor of the Exchequer, George Osborne." After Brexit issue expanding, it takes toll on the economy.
Meanwhile Warner also took note on director general of British Chamber of Commerce John Longworth's resignation after stating his personal support on Brexit. Warner said, "Yet people have to be allowed to say what they think, and he made it abundantly clear he was speaking in a personal capacity. The Brexit debate is already ugly enough, but by the look of it, it is about to get a great deal uglier."
Chancellor Goerge Osborne seems more preoccupied with Brexit issue rather than focusing on economic matters. In this regard, Labour Party's MP Rachel Reeves blasted George Osborne for being more interested in "outmanoeuvring" Boris Johnson in the EU referendum than tackling Britain's sluggish economic recovery. The Huffington Post reported her comments, as she accused Chancellor Osborne to focus more on a short-sighted game between him, Boris Johnson and other top Tory government leaders.
Facing a hurdle in the budget plan, Chancellor of the Exchequer George Osborne seemed to be more interested in dealing with Brexit issue. As the issue and economic slowdown has decimated is budget plan.