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Backing for spending cuts delay Backing for spending cuts delay
(about 4 hours later)
More than 60 senior economists have signed two open letters that back the chancellor's decision to delay government spending cuts until 2011.More than 60 senior economists have signed two open letters that back the chancellor's decision to delay government spending cuts until 2011.
The letters in the Financial Times say that any measures to trim the budget deficit this year could risk dragging the country back into recession.The letters in the Financial Times say that any measures to trim the budget deficit this year could risk dragging the country back into recession.
They are being seen as a riposte to the 20 economists who on Sunday backed the Conservatives' call for cuts this year.They are being seen as a riposte to the 20 economists who on Sunday backed the Conservatives' call for cuts this year.
Those economists said cuts were needed in 2010 to reassure the markets.Those economists said cuts were needed in 2010 to reassure the markets.
They put this forward in a letter to the Sunday Times.They put this forward in a letter to the Sunday Times.
'UK's image''UK's image'
The signatures of the two new letters include five former members of the Bank of England's monetary policy committee, including Sir Andrew Large and Rachel Lomax.The signatures of the two new letters include five former members of the Bank of England's monetary policy committee, including Sir Andrew Large and Rachel Lomax.
One of the letters asks how "foreign creditors will react if implementing fierce spending cuts tips the economy back into recession".One of the letters asks how "foreign creditors will react if implementing fierce spending cuts tips the economy back into recession".
The Treasury recently said it it hoped the public deficit - the difference between government spending and the income it receives through taxation and other sources - would stay below £170bn for the current financial year.The Treasury recently said it it hoped the public deficit - the difference between government spending and the income it receives through taxation and other sources - would stay below £170bn for the current financial year.
Figures released yesterday showed that the government had to borrow a further £4.3bn in January to help cover the deficit.Figures released yesterday showed that the government had to borrow a further £4.3bn in January to help cover the deficit.
The issue of reducing the government's deficit and wider public debts has become a political battle ahead of the general election.The issue of reducing the government's deficit and wider public debts has become a political battle ahead of the general election.
A Conservative Party spokesman said: "Twenty leading economists, plus business leaders, including Richard Branson, agree with us that the failure to have a credible plan to reduce the deficit threatens to undermine the recovery and push up interest rates.
"We are happy to have that debate with the government."