Budget deficit: OECD warns UK is ‘cutting too fast’

26th May 2011

The warnning came from Pier Carlo Padoan, chief economist of the Paris-based Organisation for Economic Co-operation and Development (OECD).

He told The Times newspaper (paywall) that there was "scope for slowing the pace," after the thinktank cut its UK growth forecast for the second time this year.

The Guardian reported that the OECD forecasts for UK economic growth in 2011 were "significantly" lower than those of the UK government's financial watchdog, the Office for Budget Responsibility.

It has predicted growth of 1.7% this year and 2.5% for 2012.

Earlier this week The Guardian website reported that the OECD had warned the Bank of England to start raising interest rates to prevent inflation "taking hold in the UK".

Borrowing costs would also have to rise, it added.

Some commentators on the Guardian's story questiond the Government's ability to deal with defict

Jimlad writes: "Slowly the chickens are coming home to roost. The coalition can't say they weren't warned.

"Without their creative accountancy the real headline should read. Britain falls back into recession. But I'm afraid things will need to get a great deal worse before the Coalition take some carefully worded advice and accept.

1 thought on “Budget deficit: OECD warns UK is ‘cutting too fast’”

  1. Anonymous says:

    Thought provoking indeed.    I lived in California for several years and brought this very point up to the local library who had asked for my driving licence before i could join.   “Everybody has a driving licence” was the reply.   And of course not everyone had, for some people couldn’t drive for a variety of reasons, not only poverty.   Never did find out what those people did.   Then I moved to S Africa where people have to get a barcoded identity document which ordinarily would have riled me (being British) but after California I realised how useful such a document might be.   That has problems too; if you don’t have one you dont exist, and if you have an incompetent civil service getting one may take years.   People have committed suicide for lack of such a document.  S’truth.   Nothing is simple anymore.

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