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Deficit busting plan is 'biggest mistake in century'

A FORMER rate-setter at the Bank of England has labelled the Government's proposed programme of spending cuts "the greatest macro-economic mistake in a century".

US-based economist David Blanchflower had his recession warnings and calls for interest rate cuts snubbed when he was a member of the Bank's Monetary Policy Committee (MPC).

An economics professor at Dartmouth College, New Hampshire, Mr Blanchflower has now warned against Chancellor George Osborne's deficit-busting plans.

He said: "This Government is proposing a programme of spending cuts and tax increases that have no historical precedent.

"The latest data, especially from business and consumer surveys, suggests that confidence is collapsing.

It started to do so from the day the coalition took power and its leaders started talking down the economy. The cuts look likely to generate a long decade of slow growth."

Mr Blanchflower added: "The Government has no plan B for when the data starts to worsen, as they surely will. That process has already started."