Economists forecast bleak year ahead
A poll of economists by FT say this year could rival 2009 in terms of economic weakness
By CFOWorld.co.uk | CFO UK | Published 09:27, 03 January 12
This year could rival 2009 for economic weakness as output continues to be hit by the euro zone debt crisis, according to a poll of economists by the Financial Times.
The FT said its survey of 83 economists, including 11 former members of the Bank of England's monetary policy committee, showed that the number of respondents who believed the economic outlook would deteriorate in 2012 was three times those that thought it would improve.
Even if there was a double-dip recession in 2012, however, only a small minority urged chancellor George Osborne to abandon his seven-year austerity plan in favour of stimulating the economy with tax cuts or more public spending, said the newspaper.
"The (Osborne deficit-reduction) plan was a bit bold, but having got the credit for that in (lower government borrowing) rates we should not backtrack now," John Gieve, former Bank of England deputy governor, was quoted in the report as saying.
Only 21 economists agreed with opposition Labour Party shadow chancellor Ed Balls that the austerity measures were "too far and too fast", the newspaper said.
Almost all those expressing an opinion said that the UK outlook would be much worse if the euro collapsed, illustrating their belief that Britain will not be the master of its own economic destiny this year, according to the FT.
Sir Alan Budd, founding chairman of the Office for Budget Responsibility, described the UK's predicament as a "choice between extended misery if the euro survives and catastrophe if it doesn't".
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