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Budget cuts could cause crisis, warns East End economist

PUBLISHED: 13:01 22 June 2010 | UPDATED: 16:11 05 October 2010

A leading academic from Queen Mary College says the planned cuts to be announced in the emergency budget are a ""foolish strategy."" Professor Stefano Harney, deputy director of the school of business and management, has warned of the effect too many cuts

A leading academic from Queen Mary College says the planned cuts to be announced in the emergency budget are a 'foolish strategy'

Professor Stefano Harney, deputy director of the school of business and management, has warned of the effect too many cuts will have on the economy.

And he fears Chancellor George Osborne could plunge the fragile recovery back into crisis.

He told the Advertiser: "The chance of deep cuts leading to an end to the recession are about as likely as England winning the World Cup, and just like with the England team, we in the UK will have only ourselves to blame for this foolish strategy."

And Professor Harney believes the UK should follow the example of other areas who have been hit by the recession.

He said: "The feverish obsession with fiscal cuts in Europe is in contrast to American and now Chinese insistence on stimulating domestic demand to fight the recession.

"Just watch which approach comes out on top. It won't be the Chancellor's.

"Meanwhile, the US and Asia will be playing in a strong economy long after we have gone home to our double dip recession."

The budget - Mr Osborne's first as chancellor - is due to start at 12.30pm.


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