Bank of England: no more tax cuts

27 March 2009

Bank of England Governor Mervyn King has told the Government that Britain cannot afford any further tax cuts or public spending increases to fight the recession.

Mr King said that the country faces "very large fiscal deficits" and that the Government should be "cautious".

The announcement comes at the same time as Gordon Brown is thought to be considering another large `fiscal stimulus package` of tax cuts and rises in spending, according to The Telegraph.

Earlier this month, the Bank of England took the major step of `quantitative easing`, in which new money is created to buy Government bonds and increase cashflow within financial institutions, with a view to increasing levels of lending.

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Tags: bank, bank of england, base rate, base rate cuts, cut, interest rates, interest rate cut, Mervyn King, government, quantitative easing

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