Half a million to lose jobs due to cuts

FROM UNITED KINDOM (ENDLAND):

The coalition's austerity drive will get under way in earnest later when the Chancellor unveils some of the biggest spending cuts ever attempted in the Western world.
Have your say Financial Crisis

George Osborne is expected to warn of a "hard road" ahead as he details £83 billion of reductions to tackle the deficit, which will see nearly 500,000 public sector jobs culled over the next four years.

But economic forecasters have dealt an early blow to the Government's spending cuts as they warned the measures would not shrink the deficit as quickly as expected.

The National Institute of Economic and Social Research (NIESR) said lower growth would lead to less taxes, which would hold back efforts to rein in Britain's ballooning debt.

NIESR predicted the fiscal deficit will fall to 3.6 per cent of gross domestic product (GDP) in 2014/15 rather than the 2.1 per cent forecasted by the independent Office for Budget Responsibility (OBR).

It said the main reason was that growth would be slower than the OBR assumed, reducing the tax base.

In its latest forecasts for the UK economy, it also said the Government may struggle to go through with the cuts at the pace and scale implied in its emergency Budget.

It said if this were the case, the Government should meet the shortfall by raising direct taxes.
"If the cuts were half the size and direct taxes were raised to fill the gap, then output growth would be 0.25 per cent higher in 2011 and 2012," said NIESR.

The group has revised down its growth forecasts for 2011 and 2012 in the face of the Government spending review.

It believes the UK will see GDP of 1.6 per cent in each year, down from original predictions for 1.7 per cent in 2011 and 1.8 per cent in 2012.

The group said there remained a one in five chance that output would fall in 2011 as a whole

INPUT FROM YAHOO