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Prudence in Peril?

John Hawksworth Head of the Macroeconomics Unit at PricewaterhouseCoopers LLP outlines the economic implications of the Pre-Budget Report
The Chancellor remained upbeat in his Pre-Budget Report (PBR) arguing that his public spending plans could be afforded without further tax increases. But how prudent are the Chancellor's forecasts for the public finances and will he meet his Golden Rule of borrowing only to invest over the economic cycle? Like other independent commentators we have doubts about the new Treasury numbers for both economic growth and public borrowing. We discuss these in turn below before taking a quick look at the implications of the Government's new inflation target.
Treasury growth forecasts still relatively optimistic beyond 2003

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