The budget deficit in Britain set a record in August, and Chancellor of the Exchequer George Osborne could be in for some tough times from the British public should he continue to push through cuts in an attempt to contain it.
Bloomberg reported Friday that the London-based Office for National Statistics announced a new record shortfall, not including the government’s support for banks, of 14.4 billion pounds ($23.5 billion). Tax revenues posted an increase of 1.8%, but government spending topped that at 2.5%.
Economists believe that Osborne will have to make a tough choice: either surrender his self-imposed goal of cutting the deficit in three years or continue to follow an austerity program that is almost certain to provoke a backlash from the public.
“If you extrapolate from today’s figures, we will be somewhere between 10 billion and 35 billion higher than expected for the year,” said George Buckley in the report. Buckley, an economist at Deutsche Bank in London, added, “The deficit is only fractionally higher than last year, so in some ways it’s good news, but we’re still looking at a big overshoot.”