- ING Bank.
According to the official figures released by the Office for National Statistics on Friday, the U.K. public sector net borrowing rose more than expected to 14.4 billion pounds in June, which was 0.5 billion pounds higher than in June 2011. This raises concerns whether the U.K. will be able to meet its deficit reduction target this year.
"It is clear that the recession is leading to a worsening of the U.K.'s underlying fiscal position and raises more question marks over the effectiveness of the government's austerity measures," said James Knightley, Economist at ING Bank.
"We expect the economy to grow only modestly, slowed by weak demand due to low confidence, the uncertainty due to tensions in the euro area, tight credit conditions, and lower spending from the government, businesses and households as they cut debt," said Ajai Chopra, Deputy Director of the IMF's European Department.
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