By Marcus Leach
A new report released by the Organisation for Economic Co-operation and Development (OECD) says the UK’s economic recovery will be subdued for the next two years.
Due to government spending cuts and the slowing of world trade the economy will only see a marginal increase over the coming two years. OECD figures forecast a 1.5 per cent increase for the current year, growing to 2 per cent in 2012.
Having previously said the government’s spending cuts were “substantial but necessary”, the new OECD report says the cuts are “ambitious but necessary” in order to achieve a sustainable recovery.
"Monetary policy should remain expansionary, even if headline inflation is significantly above target, to support the economy,” the report said.
"All in all, a subdued recovery is expected over the next two years."