FAILING to reduce the government’s deficit could see bond markets rapidly closing in against the UK, a City based economic forecaster will say today.
And costs of servicing the government’s debt will soon exceed public spending on education, according to financial consultancy Fathom, which holds its monetary policy forum in London this morning.
Servicing general government debt will cost £57.8bn by 2013-14, it said, at which point education spending will have increased to £56.6bn. Government spending has continued to rise in this financial year.
Describing the austerity measures as “essential and urgent,” the forecast dismissed shadow chancellor Ed Balls’ call for a “Plan B” that relaxes fiscal consolidation.
“We have very little time for those arguments,” it said.