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Top economists back George Osborne's economic strategy

OSBORNE OUTSIDE HMT 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:

  1. "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.
  2. "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.
  3. "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.
  4. "The bulk of this fiscal consolidation should be borne by reductions in government spending." That's Tory policy.
Meanwhile The Sunday Telegraph reports that Brown and Darling are at loggerheads over March's Budget. Brown wants a budget full of political promises. Darling, anxious to restore his reputation after a PBR that ducked the deficit challenge, wants to deliver a more responsible statement that will cut Britain's borrowing.

* 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:


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