UK Chancellor Gordon Brown must cut back on spending plans to avoid wasting money and to prevent future tax hikes, according to the OECD. The Paris-based think tank said that Brown's increased spending on health and education was not delivering better services. "Although there are signs of better service outcomes and improved quality of services, some of these represent a continuation of earlier trends that were visible before the substantial recent spending increases were initiated," it said in a report on the British economy. The OECD said that if Brown keeps spending at this rate, he will soon run close to breaching his so-called "golden rule" and will be faced with a choice between higher taxes and user charges.
The government has rejected the OECD's analysis of the potential impact of its planned spending growth. A spokesman said the government "continues to believe that its spending plans remain fully affordable and consistent with its investment rules". //www.fxcentre.com