Economists urge Darling to postpone public spending cuts

Fri 19 Feb 2010

The chancellor of the exchequer has been urged to avoid implementing major cuts in public spending next year.

More than 60 economists including Sir Andrew Large, former deputy governor of the Bank of England, wrote two open letters insisting that Alistair Darling should delay public spending cuts until 2011.

The financial specialists argued that withdrawing the government stimulus prematurely would be a dangerous and reckless move that could trigger another deep recession.

However, the signatories agreed that a clear plan for reducing the government debt does still need to be laid out.

This latest development demonstrates the extent to which opinions are divided in the economics fraternity.

Last week, another group of financial experts wrote to the Sunday Times insisting that public spending cuts should be made sooner rather than later, a policy endorsed by the Conservative Party.

Virgin head Sir Richard Branson has also publicly stated that the winner of the next general election needs to make "tough decisions" regarding public spending straight away rather than in 2011.