Business groups across UK are calling in the Government not to go ahead with the reduction in the spending on healthcare and international aid. They argue that taking these steps will prove counterproductive and would have a debilitating impact on the entire process of economic recovery.

It was stressed by the British Chambers of Commerce that measures like this will lead to a lot of problems and they will prove unsustainable in the long run. But the new Government is also under pressure due to the high amount of fiscal deficit and may have to resort to these measures to achieve its targets.    

The British Chambers of Commerce stressed that the Government needs to seriously consider these steps before taking them as they can be like a double edged sword.

Economic experts also echo these views and they feel that the Government must ensure that it does not take any knee-jerk reactions in order to tackle the economic situation, which is prevalent in the country.   

It is also felt that the UK economy is over dependent on the domestic demand and the public sector. The economy needs to be more focused on business and the exports sector.  

Most of the businesses feel that increasing VAT rates is better than taking any other measures. Business surveys have revealed that almost 61% business leaders are ready for these steps compared to any other measures. Increasing the rate of VAT to 20% from the existing 17.5% will ensure an additional £1bn for the UK economy every month.