OBR member warns of double dip risk
The massive spending cuts, implemented by the Government, have increased the chance of a double dip recession – according to a senior member of the Office for Budget Responsibility (OBR) – the economic forecasting body.
This is the opinion of Geoffrey Dicks who said public spending cuts and a hike in taxes will have slashed the forecast for growth which “logically increases the possibility of a double dip”.
His view comes after many economists have previously said that the Government’s massive spending cuts could pose a threat to the economic recovery.
Last month, Professor David Blanchflower, a former member of the Bank of England’s Monetary Policy Committee (MPC), warned that cutting the deficit too quickly risks putting the UK back into recession.
The new coalition Government has reiterated that its top priority is to implement these tough spending cuts but many leading business groups believe it should delay making big spending cuts as the recovery is still weak.
Chancellor George Osborne’s predecessor, Alistair Darling, also warned that cutting the deficit too quickly could pose a threat to the fragile recovery.