Power warns of difficult times ahead

Friends First's Chief economist, Jim Power, warned December's budget could be the most difficult of the past 10 years.

He was speaking at the launch of the latest Friends First economic report.

He said that while public finances may look positive overall, the economic background for the next 18 months will ensure a need to keep tight controls on spending and bring in as much tax revenue as possible.

"This all points towards the December budget being the most difficult in a decade," he said.

Power also said that revenue from tax would remain weak, and VAT receipts and stamp duties will not be as strong as in the recent past as activity in the housing market declines and consumer spending is lowered.

He predicts that the tax shortfall this year will be €250m greater than the estimated €500m.

He said that the stringent controls on spending would affect would adversely affect ministries such as health and education, in turn affecting those in receipt of services from them.