Need for tax increases has not changed

The Governor of the Bank of England, Mervyn King, has said that the need for an increase in tax revenues has not gone away, despite Gordon Brown's recent tweaking of the 'golden rule' on public finances.

In July, Mr Brown announced that the current economic cycle started two years earlier than previously estimated. That reassessment gave him extra surplus to play with when calculating whether he'd met his own golden rule - that budget deficits must be balanced with surpluses during an economic cycle.

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