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UK economy skating on thin ice |
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Written by Sophie
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Thursday, 26 April 2007 |
Forecast group Ernst & Young's Item Club says that it is worried about the risks individuals, SMEs, larger firms and ministers are taking when it comes to borrowing money.
Its influential Spring forecast said people are “overly relaxed about risk” and are “spending [money] as if it was going out of fashion”.
The Treasury said the UK's performance and household finances remained strong but the report highlights the current deficit in the public sector and expresses surprise that it built up at a time of economic strength and buoyant tax revenues. “Ultimately we are all skating - not to say wobbling - on thin ice,” he added.
The Item Club also says that the business sector is driving economic growth faster than either government or consumer spending and says that business investment at the end of 2006 was 13.5 percent higher than it had been a year before.
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