Chancellor In Danger Of Breaking His Rules

5.12.22pm GMT Wed 21st Jan 2004

Official figures released today by the Office of National Statistics showed the Public Sector Net Cash Requirement increase dramatically by £2.4 billion in December 2003 on the previous year. This could indicate a trend to bigger deficits raising fresh doubts about the ability of the Chancellor to meet his Golden Rules.

Vincent Cable MP, Liberal Democrat Shadow Chancellor, said: "One month's figures are not decisive but they suggest growing difficulties for the Chancellor in balancing his budget. The Chancellor may now be in danger of breaking his golden rules."

"There is a wider concern over the credibility of the Government's economic assessments. We need the National Audit Office or an independent fiscal policy committee to be allowed the freedom to assess the assumptions behind Government forecasts. There is a danger that because the bond markets do not believe the Government they will overreact to bad news."

"The creation by the Government of the MPC has been fundamental to the economic stability we have seen in recent years. We must have this same sort of transparency and independence in respect of fiscal policy."