Britain and the World economies

The Fiscal Responsibility Bill has been voted through the London House of Commons. It requires the British government to reduce their budget deficit of £178 billion (12.6% of GDP) in 2010 to 5.5% of GDP by 2013-14. This means that there will be a huge contraction of government spending in England in particular – because of a bias towards more money per head in those regions with devolved parliaments. That will inhibit Ireland’s export opportunities to our immediate neighbour. It will also mean that the £ Sterling will likely further devalue against the Euro particularly if Germany, France and Italy recover significantly. This is even assuming that Greece and Ireland stay on Euro life support. This merely compounds our difficulties.

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