BRITAIN’S budget deficit is set to become the worst in the European Union, even overtaking Greece, the European Commission warned ahead of today’s general election.
The commission’s forecast puts UK borrowing at a staggering 12 per cent of GDP in 2010, higher than in any of the 27 EU countries and worse than Greece and Ireland, which have deficits of 9.9 per cent and 11.7 per cent respectively.
The gloomy forecast highlights the challenge that faces the incoming government, which will have to slash public spending in order to bring the deficit down and reassure jittery financial markets.
EU commissioner Olli Rehn said the “first and foremost challenge of a new government” will be to tackle the country’s borrowing.
He added: “The first thing for the new government to do is to agree on a convincing, ambitious programme of fiscal consolidation in order to start to reduce the very high deficit and stabilise the high debt level of the UK.”
The Tories seized on the commission’s comments, saying they were a “damning indictment of Gordon Brown’s economic record”.
Shadow chancellor George Osborne said: “He has left this country with the largest budget deficit in Europe – larger even than Greece. If any more evidence was required of the need for change to get our economy back on track, this is surely it.”
Labour attempted to shrug off the bad news, instead pointing to the commission’s forecast for UK growth this year, which was hiked from 0.6 per cent to 1.2 per cent.
Prime Minister Gordon Brown said: “Today the European Union has confirmed that under our policies Britain will be the fastest growing in Europe next year.”
But the commission’s prediction of growth of 2.1 per cent in 2011 was well below the 3 to 3.5 per cent that chancellor Alistair Darling predicted in his March Budget.