By Lora Coventry
Thursday March 25, 2010 at 10:00
In order to fulfill the Chancellor's expectation of 1.25 per cent real GDP growth in 2010, and expectations of 3.25 per cent growth in 2011 and 3.5 per cent in following years, consumers will have to lower their savings ratio to compensate for the reduced government dis-savings of the lower budget deficit, he says.
"We view this prospect as extremely unlikely if not impossible given the outlook for continued relatively high unemployment and negligible public and private sector pay growth," he adds.
says that this suggests the deficit will decline at a significantly slower rate than the Chancellor projects over the next few years.