The U.K. economy has got economists all a-flutter with a series of confusing data, causing more criticism of the coalition government’s policies as it prepares for a high-profile job swap.
The recent rebuking of Chancellor of the Exchequer George Osborne’s deficit-cutting program by members of an influential group of economists who previously supported him is a case in point.
“It’s very difficult to get a serious economist to say that the government did the right thing then and now. That’s no longer an intellectually credible viewpoint,” Jonathan Portes, director of the National Institute of Economic and Social Research, told CNBC Friday.
Osborne has clung on to the U.K.’s maintenance of its triple-A credit rating as a vindication of his policies, but the criticism of cuts to government spending remains.
Ratings agencies Moody’s and Fitch have warned that they may downgrade the UK from triple-A status if government borrowing and debt rose higher than forecast – which looks increasingly plausible.
“It’s not clear that a downgrade will matter. The agencies will merely be stating the obvious: that the UK’s debt and deficit are rather high,” analysts at Credit Suisse wrote in a research note.
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