Economists 'divided over spending cuts'

30 March 2010 at 16:05

Economists 'divided over spending cuts'Economists are split down the middle when it comes to government cuts in spending, those with Financial Services Authority authorisation (FSA authorisation) have been told.

Michael Baxter, editor of investmentandbusinessnews.co.uk, said that half of economists believe the government needs to carry out swingeing cost cuts, while the other half believes this would be disastrous.

"I think it would be quite risky to announce big sweeping cost cuts; my own view is that the key for the UK to repay its fiscal deficit is to promote growth," Mr Baxter commented.

He advocated encouraging business by providing support for entrepreneurs and building on the cheapness of the pound.

In the recent Budget, chancellor Alistair Darling said that in 2010-11 borrowing will be £163 billion, partly because of one-off factors boosting receipts, such as this year's tax on bank bonuses.

He claimed that borrowing will fall to £131 billion in 2011-12 and reach £74 billion in 2014-15.ADNFCR-3006-ID-19697078-ADNFCR

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