CHANCELLOR George Osborne must persevere with his deficit cutting and reform programmes, despite a slowdown in growth, the Organisation for Economic Co-operation and Development (OECD) said yesterday.
The spending cuts “will bring long-term gain” the OECD said, although it lowered the UK’s growth forecast for this year to 1.5 per cent, from 1.7 per cent.
Britain’s recovery “faces significant headwinds during 2011,” it said.
The forecast was leapt upon by Labour shadow chancellor Ed Balls.
“The evidence is mounting that his [Osborne’s] reckless plan to cut deeper and faster than any other major economy in the world isn’t working,” Balls said. “He has just a week until the Budget to come up with a plan B.”
And the chancellor will be urged to consider a so-called “plan B” today by the Institute for Public Policy Research.
The left-leaning think tank is expected to say that the deficit could still be eliminated by 2017-18, even without annual deficit reduction targets.
However, Osborne seems determined to see through his plans, and insists budget will mark the transition “from rescue to reform.”