NIESR: Chancellor should tone down austerity measures

The National Institute of Economic and Social Research (NIESR) has called on the government to loosen its debt reduction plans as growth forecasts are slashed for the UK.

The think-tank forecasts a contraction in the UK economy this year of 0.5%, down from an initial estimate of zero growth. It also warned the recovery would not begin in earnest until 2014, as the deterioration of the UK economy becomes "more pronounced than expected". However, NIESR said had the government delayed austerity this year, the economy would have grown 1.2%. Delaying the austerity programme by three years would also put 200,000 people back into work and raise economic growth by £239bn over a decade. Even if the government is not prepared to delay austerity, NIESR sa...