The National Institute of Economic and Social Research, who published its economic analysis earlier this week, has slashed its growth forecast for the year from zero percent to a contraction of 0.5 percent; although they have suggested that if the government had delayed its austerity programme for this year, the economy would have grown by 1.2 percent.
The latest suggestions from the National Institute of Economic and Social Research is set to add further pressure on the government to respond to the double-dip recession with a new growth strategy; and the think-tank have suggested that even if the government are not prepared to delay their austerity programme, they should look to loosen its debt reduction plans and borrow more to pay for key infrastructure projects.
A spokesperson for the think-tank added: “It remains the case that there is scope for a less aggressive path of fiscal tightening.”
The warnings from the think-tank come after the Bank of England opted to keep interests rates on hold at 0.5 percent and leave the quantitative easing programme unchanged for August.
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