According to an OECD report, the UK fiscal burden will reach 42.4 pct of gross domestic product this year. That compares with 42.1 pct in Germany, often held up as the epitome of European-style high-tax government.
From next year, the UK government will also spend a higher proportion of the country's output, with public spending set to reach 45.7 pct of GDP against Germany's 45 pct.
Bank of America chief European economist Holger Schmieding told the Observer newspaper that the figures suggest Chancellor of the Exchequer Gordon Brown's policies have "put Britain firmly in the European camp, and moved it away from the US".
The convergence between the UK and Germany reflects a big increase in investment in public services by Brown at time when Germany has been trimming government spending in order to comply with euro-zone budget deficit limits, the Observer said.
David Smith, chief economist at City stockbrokers Williams de Broe, told the Business newspaper that the rising tax burden means the UK is unlikely to keep growing at a faster pace than the euro zone in future.
"The British political class must answer a simple question: Why should Britain's growth rate and structural rate of employment continue to be higher than the pathetic rate of Germany and Italy now that we are adopting their tax and spending levels," the Business quoted him as saying. newsdesk@afxnews.com mn/ak
COPYRIGHT
Copyright AFX News Limited 2005. All rights reserved. The copying, republication or redistribution of AFX News Content,inculding by framing or similar means, is expressly prohibited without the prior written consent of AFX News.
AFX News and AFX Financial News Logo are registered trademarks of AFX News Limited
For more information and to contact AFX: www.afxnews.com and www.afxpress.com
© 2006 AFX News
