Concerns for UK economy as many call for “Plan B”

| June 6, 2011

Some of Britain’s top economists are calling for Chancellor George Osborne to come up with a plan B for the UK economy.

It has been suggested that the Chancellor’s massive spending cuts are too harsh for the fragile economy and a plan B on economic policy is required.

The comments come shortly after the OECD’s chief economist, Pier Carlo Padoan, 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.

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.

However, Mr Osborne continues to stand by his plan for reducing the budget deficit and believes the cuts are harsh but necessary and told BBC Radio 4’s Today programme: “Our plan provides credibility, stability and confidence in the British economy.”

The Chancellor did not talk about a plan B but added there is “flexibility” in the plan.

In the meantime, the International Monetary Fund (IMF) will today provide its assessment of the UK economy.

Late last year, the IMF said the UK economy was “on the mend” but since that time, the economy contracted in the last three months of the year and grew by just 0.5% in the first quarter of 2011.

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  1. les says:

    “Some of Britain’s top economists”

    Funny that – the BBC referred to them as left leaning academics!