Former MPC member warns of double dip recession

| June 13, 2010

Professor David Blanchflower, a former member of the Bank of England’s Monetary Policy Committee (MPC), has warned that cutting the deficit too quickly risks putting the UK back into recession.

Mr Blanchflower, who is professor of economics at Dartmouth College in the US, told Sky News today that further investment is required to build growth.

The new coalition Government has reiterated that its top priority is to implement these tough spending cuts, however, many appear to agree with Mr Blanchflower‘s opinion to hold back making big spending cuts.

The British Chambers of Commerce (BCC) recently said the Government should delay making big spending cuts as the recovery is still weak.

Chancellor Osborne’s predecessor, Alistair Darling, also warned that cutting the deficit too quickly could pose a threat to the fragile recovery.

Furthermore, prior to the general election, the Liberal Democrats said such measures could threaten the recovery but have since endorsed the cuts.

Talking to Sky News, Mr Blanchflower, said: “I think if these plans are implemented it is almost certain that we are going to have a double dip recession.

“The issue is: where is the growth coming from in the economy?. We need a plan for growth, we shouldn’t be cutting now”, he said.

Professor Blanchflower received a CBE in the Queen’s Birthday Honours last year after correctly predicting in November 2007 that the UK may face a recession.

He also called for interest rate cuts a year before his fellow members on the MPC.

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