Morning papers: Recession blows £170bn hole in budget
The government faces a budget black hole of £170bn as Britain endures the longest economic slump for a century, experts said last night, reports the Daily Mail.
Shock figures this week showed Britain has suffered its first double-dip recession since 1975, leaving the country stuck in an even worse downturn than in the Great Depression of the 1930s.
The return to recession fuelled fears the Treasury’s growth forecasts are too optimistic, with disastrous consequences for the creaking public finances and George Osborne’s deficit-reduction plans.
Osborne will struggle to cut another £77bn, warn MPs
Serious doubts over George Osborne’s ability to slash £77bn from government spending are raised by an influential group of MPs today, reports the Independent.
They warn that Whitehall has yet to identify where all the money can be found - and say they are worried the chancellor still does not have a firm enough grip on driving through the austerity programme.
Inflation puts skids under high street sales
High street sales came off the boil in the first half of April as shoppers stung by rising inflation shied away from expensive purchases, the CBI warned yesterday, reports the Independent.
The organisation’s distributive trades survey showed a 6 per cent balance of retailers saw lower sales than a year ago, deflating rising hopes of a sustained revival after encouraging sales in recent months.
Monti hits at eurozone austerity push
Mario Monti, Italy’s prime minister, has added his weight to criticisms of austerity-led reform efforts in the eurozone, saying the policies were shrinking Europe’s economy and could deepen a double-dip recession, reports the Financial Times.
Dutch strike budget deal to avert crisis
Dutch political parties reached a deal on a 2013 budget on Thursday, averting crisis and enabling a country that has championed euro fiscal discipline to meet a European Union deadline set for Monday, reports the Financial Times.
BoJ plans to boost bond purchases
The Bank of Japan stepped up its fight against deflation on Friday by saying it will boost the volume of government bonds it purchases through its quantitative easing programme as well as by buying domestic sovereign debt with longer maturities, reports the Wall Street Journal.
The net increase of ¥5trn (£38.2bn) in its asset purchase programme was in line with market expectations, but the decision to buy an additional ¥10trn of Japanese government bonds as part of that came as a surprise, pushing the yen lower and lifting share prices.
Key US states face slow job growth
Job growth in the 14 states pivotal to the presidential election has advanced at a slower pace than in the rest of the US over the past year, a potential source of concern for President Barack Obama’s re-election campaign, reports the Financial Times.