By Max Clarke
Commenting on the public finance figures for January 2011 which showed a surplus of £8.5 billion, David Kern, Chief Economist at the British Chambers of Commerce (BCC), said:
‘These figures are better than expected and suggest that the government’s fiscal forecasts for the current year are on course to be achieved and may even be exceeded. They also support BCC’s assessment that the economy is recovering in the current quarter after the temporary setback seen in the fourth quarter of 2010.
But there is no room for complacency. Britain’s fiscal deficit is still huge and it is important that the government perseveres with its strategy aimed to stabilise Britain’s public finances. British business supports the need for credible deficit cutting measures over the next few years and supports the government’s emphasis on spending cuts rather than tax increases.
However, this strategy can only succeed if the austerity measures are supplemented by effective policies that enable businesses to deliver growth and create new jobs. On its part, the MPC must support the recovery by postponing interest rate increases until the initial impact of the deficit cutting programme has been absorbed. And at the same time, the Government must deliver radical proposals to support growth at the Budget on 23rd March.’