Economists are expecting the UK’s economy to struggle until the end of this year, according to a poll by the Financial Times.
The FT asked 79 economists what the biggest risks to the economy were and 37 believed the UK was faced with a fiscal crisis that would derail any type of recovery.
Howard Davies, director of the London School of Economics and a former member of the Bank of England’s monetary policy committee, told the FT: “The major risk is the loss of confidence in the Government’s ability to get the public finances back under control.”
Most of the economists thought the economy was recovering and would grow this year, but they believe the Bank of England and the Government have been too optimistic with the rate at which the economy will recover. The poll revealed that economists want the Government to make its plans to improve public finance more transparent to avoid a fiscal crisis.
When asked what should be done to resolve the deficit, the economists were split 50-50. Half believe the Tory’s plan to cut spending and increase taxes was what was needed and the other half believe Labour’s view that any rapid reductions in borrowing would undermine the UK’s economic recovery.