On Wednesday George Osborne admitted that the UK government had failed to meet both its growth and debt forecasts that it had set. This was an embarrassing moment for the Chancellor , as previous austerity measures laid out in “plan A,” were set in order to gain control over the spiralling UK national debt. Further austerity measures were introduce as Osborne attempts to balance the books, which notably have been considerably impacted by global crisis in the US and Europe. During his speech Sterling and Gilts slowly weakened, but the majority of what was announced had already been leaked or expected. Unsurprisingly Fitch ratings said that missing the self-imposed debt targets “weakens the credibility of the UK’s fiscal framework.” In short the prized AAA credit rating that enables the UK to borrow at low rates could be under threat, with a review expected in 2013.
According to a report release by the University of California, Los Angeles (UCLA) the US economy will grow at less than an annualised rate of 2% through the middle of 2013. The economist whose thoughts are detailed, it said to have looked beyond the imminent “fiscal cliff,” assuming an agreement would be made. The report also explained that if no agreement is made on the issue of the fiscal cliff, the US economy will be plunged back into recession, and an unemployment rate of above 9%.
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