Richard Brooks of RBC speaking at the Budget breakfast at the Pomme d’Or. Picture by David Ferguson (00675377)

Richard Brooks of RBC speaking at the Budget breakfast at the Pomme d’Or. Picture by David Ferguson (00675377)

THE longer-term outlook for the UK economy may not be as rosy as UK Chancellor has painted it, say Jersey analysts.

Alistair Darling has said this week that although he expects shrinkage of 3.5 per cent, the UK will start looking up by the end of this year and will be showing positive growth in 2010.

But speaking at a post-Budget breakfast on Thursday, Richard Brooks, head of tax at RBC Wealth Management, said that some analysts believed the UK economy would shrink by more than the Chancellor predicted, and continue to shrink into the following year.

Mr Brooks said that UK government borrowing of £175 billion in 2009, plus employment – expected to rise to ten per cent in the next 18 months – would leave the country in a worse position than most and that the ‘tax the rich’ budget would do little to help.

Although painting a rosier picture was designed to help the Labour Party in the forthcoming elections, the 50% tax on earners of £150,000 per annum would not go down well in the City of London, he said.