The election of a conservative government in Britain has been welcomed by the business community. But as Kirsty Basset reports huge economic challenges remain, including a budget deficit of around 5% - almost double the EU's limit.
ATTN CLIENTS - THIS VERSION IS ACCESS ALL - BUT ALL NON-UK CLIENTS CAN USE THE EARLIER VERSION Protests in London at the weekend over the re-election of Britain's conservative government. But in the city it's another story. The business community has largely welcomed the Tories' back into power - if markets cheering the result are any indication. Huge challenges remain - not least a budget deficit at around five per cent of GDP - almost double the EUs limit of 3 per cent. Nonetheless, business confidence is strong. Peter Hemington is a partner at advisory firm BDO. (SOUNDBITE)(ENGLISH) PETER HEMINGTON, PARTNER AT BDO LLP, SAYING: "In the next 6 months we expect to see economic growth in the range 2.5 to 3 per cent. So the economic recovery is set fair for the time being, assuming we don't have any shocks that put it off course." But there are plenty of potential risks. What happens to Greece and in turn the euro zone is one factor. The Tories promising a referendum on whether or not Britain remains in the EU - and the uncertainty this breeds for businesses is another. (SOUNDBITE)(ENGLISH) PETER HEMINGTON, PARTNER AT BDO LLP, SAYING: "Look what happened in the last few days before the Scottish referendum - which obviously came up with a positive result for the UK. But when it looked like it was going to go negative, foreign investors took fright and withdrew capital at quite a rate. The UK, with this chronic issue on its current account, can't afford that." The conservatives unexpected victory was helped by Britain's economic recovery. But is the UK ready for a purely conservative budget? (SOUNDBITE)(ENGLISH) PETER HEMINGTON, PARTNER AT BDO LLP, SAYING: "We're going to see some very dramatic cuts to parts of the government that have already taken some pretty big hits to date." They've vowed to chop 12 billion pounds from the welfare budget, as they work towards another promise - to get public finances back in the black by 2019.