21/09/2011

UK Cuts Spending As IMF Forecasts GDP Fall

There's a grim warning today of a possible new global recession - with the UK in the forefront of the crash.

The fears emerged after the International Monetary Fund (IMF) slashed the UK's growth forecast and warned that the world's economy was entering a "dangerous new phase".

The grim warning prompted renewed calls for a change of direction over the coalition government's spending cuts, but ministers last night insisted that they "remain committed" to their hard-line approach to tackle borrowing.

It has also emerged that European debt worries also rose this week when Italy had its credit rating downgraded by the Standard and Poor's agency amid concern over its ability to pay off its massive borrowings.

According to the IMF, the UK will see gross domestic product (GDP) grow by just 1.1% in 2011, according to their latest World Economic Outlook, compared with 1.7% in April.

It is now also predicted to grow by 1.6% in 2012, compared with 2.3% in previous forecasts.

It also emerged today that the UK Government has already started austerity measures by cutting more than £3.3bn pounds off Scotland's budget as part of its cutbacks.

Scotland's SNP-led government is therefore anticipating a spending shortfall that will have to be met in its first budget since the Scottish National Party's landslide election win.

It is expected to announce that spending will be frozen across all departments except health.

It will also outline how it's going to pay for its plans to freeze council tax for the next five years and protect Scottish students against higher education tuition fees, which currently they don't have to pay at all, while road building, the new tramline in Edinburgh and other projects look set for being shelved or delayed.

(BMcC/GK)

Related UK National News Stories
Click here for the latest headlines.

20 January 2005
UN launches plans for global disaster warning system
The United Nations (UN) have launched extensive plans to create a global warning system to lessen the impact of deadly natural disasters.
21 June 2012
Senior Civil Servant Says Spending Cuts Could Last A Decade
Britain's most senior civil servant has warned that public spending cuts could last for up to a decade. Sir Jeremy Heywood, appointed as cabinet secretary by David Cameron last year, said the government was only a quarter of the way through its fiscal consolidation.
02 July 2010
Slower Pace As Construction Grows
The pace of growth in the UK's construction sector is slowing down - but more positively - is still rising overall. June's Markit/CIPS Purchasing Managers' Index for construction showed continued growth, but at a slower pace.
26 September 2008
Funding Boost Of £455m For Equal Pay Claims
Funding of £455m will be awarded to councils in England to allow back payments relating to thousands of equal pay claims from women workers. In a move to speed up long-term commitments to achieving equal pay for all council workers, local government minister John Healey gave the go-ahead to 34 councils to raise the money through capitlisation.
09 March 2015
Further Cuts Expected In Defence Spending - RUSI
Further reductions could be made in defence spending and personnel numbers in the Strategic Defence and Security Review, the Royal United Services Institute (RUSI) has warned. The review is due to start after the next general election. The briefing, by RUSI Research Director Professor Malcolm Chalmers, projects that the UK will spend 1.