UK’s slow rate of growth could force easing of cuts

| May 26, 2011 | 0 Comments

The OECD’s chief economist, Pier Carlo Padoan, has warned that the UK may be forced to ease its pace of spending cuts if economic growth remains sluggish.

Mr Padoan of the Organisation for Economic Co-operation and Development said if growth worsens, the Government may need to reconsider its plans for cutting the deficit.

In the past, many economists said that the spending cuts introduced by the Coalition Government are expected to hamper growth.

The cuts have received mixed responses; many have been critical of them warning that slashing the deficit too quickly could pose a threat to economic recovery and push the UK back into a recession.

In related news, the Organisation yesterday downgraded its growth forecast for the UK expecting the economy to grow by 1.4% in 2011, less than the 1.5% forecast in March.

It also urged the Bank of England to lift interest rates in the short-term to combat stubbornly high inflation.

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