The Office for Budget Responsibility told the Prime Minister that it does believe that cutting public spending will reduce economic growth in the short term.
Robert Chote, the head of the OBR, contradicted a claim Mr Cameron made this week in a speech about the economy, in which the Prime Minister said the forecaster does not believe cuts are reducing growth.
In fact, as Mr Chote wrote, the OBR believes that cuts in spending and increases in tax will depress economic activity, meaning lower growth.
Cameron rebuked over austerity claims – Telegraph.
Boris Johnson urges Osborne to drop ‘hair shirt’ agenda for UK economy | Business | guardian.co.uk.
Boris Johnson has called on the government to drop its “hair shirt, Stafford Cripps” agenda as he outlined a seven-point growth plan for London involving building thousands of new homes and investment in major infrastructure projects.
Speaking at a British business lunch in Davos on Friday shortly after therelease of figures showing the economy was again contracting, the mayor of London said it was time to “junk the rhetoric of austerity” and instead take steps to boost confidence and spending.