British economy picks up, but public deficit a priority: OECD
Economic recovery in Britain is gaining traction, helped by a pick-up in exports, but the country's massive public deficit must be tackled, the OECD said on Wednesday.
"A weak fiscal position and the risk of significant increases in bond yields makes further fiscal consolidation essential," the Paris-based group of 30 developed economies warned in its latest Economic Outlook report.
Britain, like many countries, has spent heavily to keep its economy on track during the global slump and committed hundreds of billions of pounds (dollars) to bailout a series of failing banks.
This, coupled with previous overspending, resulted in a massive blow-out in the public deficit to a record 11.1 percent of gross domestic product for the fiscal year to March 2010, according to British figures.
The OECD warned the public deficit would likely continue above 10 percent for 2010-2011, while total national debt was put at 86 percent for next year.
European rules set limits of three percent and 60 percent for the two measures but Britain, an EU member but not part of the eurozone, is only one of many countries to have breached these levels during the crisis.
© 2010 AFP