Brown should heed CBI warning about another fiscal stimulus

George Osborne has urged Gordon Brown to listen to warnings from the CBI against another debt-funded fiscal stimulus.

In their Budget submission, the CBI (the Confederation of British Industry) make clear that the alarming state of the public finances rules out the option of a further significant fiscal stimulus, as it would undermine business and institutional investor confidence in the UK.

George, the Shadow Chancellor, said, “This is a very significant moment. Coming hard on the heels of European governments, this warning from the CBI about the dangers of a further debt-funded fiscal stimulus supports the Conservative argument about the risks of rising debt.”

And he stressed, “Gordon Brown is now looking increasingly isolated at home and abroad in his attempt to make the argument for even more borrowing.”

The German Chancellor Angela Merkel recently rejected calls for European nations to consider new fiscal stimulus packages to help ease the impact of the global downturn - and a key econmoic think-tank, the Ernst & Young Item club, warned the Government has limited scope to implement its planned stimulus package as borrowing soars