Research says cuts could aid UK

The UK’s deficit cuts are unlikely to stall the recovery, and could even be economically expansionary, an academic paper showed yesterday. “Relaxing spending cuts would not necessarily improve the prospect for short-term growth,” the Oxford University Centre for Business Taxation report said. Fiscal cuts are more likely to be expansionary if there is an initially high level of government debt, the deficit reduction is large, and more reliance is placed on spending cuts than tax hikes. “All of these are true in the UK,” the report said.