The Government should ramp up infrastructure spending to boost Britain's growth prospects and offset a muted global recovery, the Organisation for Economic Cooperation and Development has urged.
More spending cuts were vital to
stabilise public finances, the OECD said, but added: "Continuing to
shift the composition of public expenditure in favour of infrastructure
investment would enhance growth prospects." Photo: Alamy
The Paris-based think-tank trimmed its 2013 UK growth forecast to 0.8pc on
Wednesday, from a December forecast of 0.9pc, and said the economy faced "strong
headwinds" from a recession-hit eurozone and slow income growth in the
UK.
The OECD also cut Britain's 2014 forecast to 1.5pc from 1.6pc, and said it
expected UK growth to pick up "gradually" this year and next.
More spending cuts were vital to stabilise public finances, the OECD said in
its biannual report on global growth, though it added: "Continuing to
shift the composition of public expenditure in favour of infrastructure
investment would enhance growth prospects."
The think-tank's assessment comes just days after the International Monetary
Fund called
for Chancellor George Osborne to borrow as much as £10bn extra this year for
infrastructure spending and business tax cuts to make sure Britain’s
recovery takes hold.
The OECD acknowledged recent doubts over the effectiveness of the Bank of
England's £375bn quantitative easing (QE) programme. However, it said that
changes to the Bank's remit would give it "greater flexibility" to
meet its 2pc inflation target and enable the Bank to "adjust its
monetary stance to economic developments
