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Loans 'contribute to buoyant UK economy'
23/04/2007
The UK's economy is buoyant, but much of the growth has occurred via borrowing, new research states.
Overall public sector net borrowing is predicted to reach £34 billion in 2007-08, raising questions about what the chancellor will do if the economy takes a turn for the worst, according to the Ernst & Young Item Club's quarterly report.
The Item Club indicates that the UK's economy grew by 2.8 per cent in 2006, with further increases expected for 2007.
However, borrowing, such as that undertaken through personal and business loans, is prevalent across the country, the organisation states.
According to the Telegraph, Ernst & Young's publication reads: "The current benign macroeconomic environment has made both individuals and corporates overly relaxed about risk, inflating asset values and transactions and boosting borrowing and spending."
Overall public sector net borrowing is predicted to reach £34 billion in 2007-08, raising questions about what the chancellor will do if the economy takes a turn for the worst, according to the Ernst & Young Item Club's quarterly report.
The Item Club indicates that the UK's economy grew by 2.8 per cent in 2006, with further increases expected for 2007.
However, borrowing, such as that undertaken through personal and business loans, is prevalent across the country, the organisation states.
According to the Telegraph, Ernst & Young's publication reads: "The current benign macroeconomic environment has made both individuals and corporates overly relaxed about risk, inflating asset values and transactions and boosting borrowing and spending."