"We expect to raise £1bn more in tax revenues from those who try to avoid to pay their fair share. I know not everyone believes we should spend 0.7pc of national income on development"
- George Osborne, the Chancellor of the Exchequer
During the Spending Review the Chancellor George Osborne set out limits for 2015/16 and sliced 11.5 billion pounds off the budget of Whitehall department, a medium of 8%. Moreover, further job cuts in the public sector will be made as Osborne unveiled a 10% slash for the department for communities and local government. He also pointed that bigger savings are needed on welfare and waste to invest them in the roads and railways, as well as schooling and science of the U.K. economy. Britain's government has cut overall borrowing by almost 25% since coming to power and by 30% as a share of economic output. The Chancellor is set to eliminate the structural deficits entirely already by 2014-2015.
Also Wednesday the BoE Governor Mervyn King said that the country's banks have made inappropriate representations to senior politicians, who are trying to persuade supervisors to introduce less stringent standards for leverage and capital ratios. British banks will work properly and the supervision can be improved only in case is the Prudent Regulation Authority, which supervises the banks, will do their job without political pressure. Earlier this month the BoE said that the U.K. banks needed to raise 27.1 billion pounds in capital until the end of 2012 to comply with capital and leverage standards.
© Dukascopy Bank SA