Government deficit plan supported by economists

Economist have leant their support to the government’s plans to put off spending cuts until next year.

Over 60 leading figures said in two letters published in the Financial Times today (February 19th) that making ’reckless’ early cuts could damage the country’s recovery from the recession.

The move has created two factions among economists, as it comes after a group of 20 wrote to the Sunday Times last week backing the Conservative Party’s suggestion that spending reductions should be introduced this year.

These latest letters reject the opposition’s claims that cuts are needed to reduce the risk of Britain losing its triple-A credit rating, with one, headed by cross-bench peer Lord Skidelsky, questioning the reaction of foreign investors should ’fierce spending cuts [tip] the economy back into recession’.

Gordon Brown told the Financial Times earlier this month that he is hopeful an agreement regarding a global banking tax can be reached this June at the G20 summit in Canada.ADNFCR-2318-ID-19625944-ADNFCR