There was a modest fall in net government investment compared to April 2010, reflecting the ending of past stimulus measures Going forward, the chancellor will need reasonable growth to lift tax receipts in addition to January's further hike in VAT from 17.5% to 20.0%.
Nothing underscores this complex picture more than the latest uproar over an alleged collusion among power-generating companies to introduce a further hike in electricity prices.
Labour's shadow business secretary, Chuka Umunna, said the fact that ministers are "now refusing to rule out further hikes in student fees less than three years after trebling the cost of a degree underlines the depth of the crisis they have created in the student finances".
This suggests that the Bank may need to tweak interest rates up again some time in 2005.Although a further hike in interest rates cannot be ruled out, the Bank itself gives warning that the risks to growth and inflation are on the down side.
This strengthens our conviction that a further hike in rates is likely as early as next week's MPC meeting".
Yet a further hike in interest rates is not a done deal.Since the Bank's last report in November, economic growth has picked up.
The survey also revealed students were overwhelmingly opposed to government plans, outlined in its recent higher education bill, to allow universities to raise their fees further, with 86% of the 15,000 students who took part in the survey against any further hike and just 8% in favour.
There is a risk that higher interest rates will hit consumer and business confidence if there is a fear of further hikes to come.
Out-of-state students — whose rising numbers have irked legislators and California families — are expected to face 5% tuition increases to about $36,900 next year, and further hikes in later years, officials said.
Further hikes, however, are unlikely to be weathered without the help of more innovative solutions.
