Top economists back George Osborne's economic strategy
Writing a joint letter to The Sunday Times, leading economists* have provided a big boost to Tory economic strategy. They warn that a failure to mount an early attack on Britain's budget deficit will produce a triple whammy for the UK economy. They warn that drift on fiscal policy will upset international markets; (1) pushing up interest rates, (2) undermining the pound and (3) throttling the recovery.
Various components of the letter (which can be read in full here) back the Tory economic view:
- "The next government should set out a detailed plan to reduce the structural budget deficit more quickly than set out in the 2009 pre-budget report." That's Tory policy.
- "The government’s goal should be to eliminate the structural current budget deficit over the course of a parliament." That's almost Tory policy. The party promises to eliminate the bulk of the structural deficit.
- "There is a compelling case, all else being equal, for the first measures beginning to take effect in the 2010-11 fiscal year." That's Tory policy.
- "The bulk of this fiscal consolidation should be borne by reductions in government spending." That's Tory policy.
* In a leader The Sunday Times acknowledges the stature of the letter's authors: "The signatories of this letter are serious people. They include several former members of the Bank of England’s monetary policy committee; a former deputy governor of the Bank and head of the Financial Services Authority; a former chief economist of the IMF and a Labour peer."
12.45pm: George Osborne talks to Sky News about the economists' letter: