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Don’t count on extra budget to revive the recovery

The government has raised the prospect of introducing a supplementary budget before the end of the year. With the recovery unwinding and an election just around the corner, it is not hard to see why they are looking to further stimulus. However, we are sceptical it will make any difference to the economy: the proposed budget is small, its funding source is unclear and any boost is unlikely to materialise until 2013, too late to affect the current slowdown.

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