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| Backing for spending cuts delay | Backing for spending cuts delay |
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| 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 say that any measures to trim the budget deficit this year could pull the country back into recession. | The letters say that any measures to trim the budget deficit this year could pull the country back into recession. |
| They are a riposte to the 20 economists who backed the Conservatives' call for cuts this year in the Sunday Times. | They are a riposte to the 20 economists who backed the Conservatives' call for cuts this year in the Sunday Times. |
| Those economists had argued a lack of a credible plan threatened to push up interest rates and undermine recovery. | Those economists had argued a lack of a credible plan threatened to push up interest rates and undermine recovery. |
| The Treasury recently said 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 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. |
| ANALYSIS By Hugh Pym, Chief economics correspondent | |
| It would be mildly amusing if it wasn't so serious. The economics profession is dividing into two gangs and throwing paper darts across the classroom. | |
| But the argument - over how to handle the government deficit - has major implications for the health of the economy. For whoever forms the next government, getting the judgement right will probably pave the way for sustained recovery and a better chance of future electoral success. Getting it wrong could raise the chance of a double dip recession and higher unemployment. | |
| The fact that eminent economists disagree on this critical issue is hardly reassuring for the workers and voters who will be affected by the Budget decisions after the election. | |
| Figures released on Thursday showed that the government had to borrow a further £4.3bn in January to help cover the deficit - the first time the government has had to borrow money in January - usually a bumper month for income from tax receipts. | Figures released on Thursday showed that the government had to borrow a further £4.3bn in January to help cover the deficit - the first time the government has had to borrow money in January - usually a bumper month for income from tax receipts. |
| Speaking at a conference in London, Prime Minister Gordon Brown reiterated that there would have to be tax rises and cuts in spending to reduce the deficit. | Speaking at a conference in London, Prime Minister Gordon Brown reiterated that there would have to be tax rises and cuts in spending to reduce the deficit. |
| "We have been crystal clear that we will halve the deficit over the next four years - indeed more than halve it," he said. | "We have been crystal clear that we will halve the deficit over the next four years - indeed more than halve it," he said. |
| "But the vast majority of the increase in our deficit since the global financial crisis hit the UK has been caused by a decline in estimated tax revenue - and so we must redouble our efforts to restore growth and get people back into work," he told the Progressive Governance Conference. | "But the vast majority of the increase in our deficit since the global financial crisis hit the UK has been caused by a decline in estimated tax revenue - and so we must redouble our efforts to restore growth and get people back into work," he told the Progressive Governance Conference. |
| 'Debate' | 'Debate' |
| The issue of reducing the government's deficit and wider public debts has become a key political battle ahead of the general election. | The issue of reducing the government's deficit and wider public debts has become a key political battle ahead of the general election. |
| A Conservative 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. | A Conservative 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." | "We are happy to have that debate with the government." |
| The writers of these letters are in danger of writing themselves out of a job Stephanie FlandersBBC economics editor Stephanie's blog in full More reactions from around the web | |
| Those signing the two new letters in the Financial Times include two Nobel laureates - Robert Solow and Joseph Stiglitz - and five former members of the Bank of England's interest-rate setting committee. | Those signing the two new letters in the Financial Times include two Nobel laureates - Robert Solow and Joseph Stiglitz - and five former members of the Bank of England's interest-rate setting committee. |
| Lord Layard, emeritus professor of economics at the London School for Economics and one of the signatories, told the BBC: "You have to remember that our deficit is the lowest among all the G7 countries except Canada," he said. "The idea that there's a debt crisis is quite wrong and we should squash it." | Lord Layard, emeritus professor of economics at the London School for Economics and one of the signatories, told the BBC: "You have to remember that our deficit is the lowest among all the G7 countries except Canada," he said. "The idea that there's a debt crisis is quite wrong and we should squash it." |
| One of the letters, organised by crossbench peer Lord Skidelsky, accused the authors of The Sunday Times letter of trying to "frighten" the public over the scale of the deficit. | One of the letters, organised by crossbench peer Lord Skidelsky, accused the authors of The Sunday Times letter of trying to "frighten" the public over the scale of the deficit. |
| It asks how "foreign creditors will react if implementing fierce spending cuts tips the economy back into recession". | It asks how "foreign creditors will react if implementing fierce spending cuts tips the economy back into recession". |
| "For the good of the British public - and for fiscal sustainability - the first priority must be to restore robust economic growth," it says. | "For the good of the British public - and for fiscal sustainability - the first priority must be to restore robust economic growth," it says. |
| The other, organised by Lord Layard, emeritus professor of economics at the London School of Economics, says Mr Darling's plan for reducing the deficit was "sensible". | The other, organised by Lord Layard, emeritus professor of economics at the London School of Economics, says Mr Darling's plan for reducing the deficit was "sensible". |
| "While unemployment is still high, it would be dangerous to reduce the government's contribution to aggregate demand beyond the cuts already planned for 2010-11," it says. | "While unemployment is still high, it would be dangerous to reduce the government's contribution to aggregate demand beyond the cuts already planned for 2010-11," it says. |
| A spokesman for Mr Darling said that the latest letters showed that shadow chancellor George Osborne had "jumped on the wrong bandwagon". | A spokesman for Mr Darling said that the latest letters showed that shadow chancellor George Osborne had "jumped on the wrong bandwagon". |
| "His judgment is wrong and his approach would risk derailing the recovery," the spokesman said. | "His judgment is wrong and his approach would risk derailing the recovery," the spokesman said. |