This is the most wildly dangerous thing I have seen in 100 years of economic policy in Britain
Joe Murphy, Political Editor - London Evening Standard
David Cameron's economic plans have been branded “wildly dangerous” by a former senior Bank of England official.
Economist David Blanchflower, former member of the Bank's monetary policy committee, said the Tories would risk plunging Britain into a deeper recession by turning off the Government's measures to stimulate recovery.
In his conference speech at Manchester, Mr Cameron said quantitative easing should end “soon”. Mr Blanchflower called the stance “bizarre” and told the Daily Mail that calling off stimulus too early would snuff out recovery. “This is the most wildly dangerous thing I have seen in 100 years of economic policy in Britain” he added. He said the Tories showed “no understanding of economics”: “It could drive the economy into depression.”
The Bank has held interest rates at their 0.5 per cent record low. So far it has created £146 billion of fresh cash, buying up debt in the form of government and corporate bonds. Mr Cameron said: “If we spend more than we earn, we have to get the money from somewhere. Right now, the Government is simply printing it. Sometime soon that will have to stop, because printing money leads to inflation.”
Chancellor Alistair Darling said: “If we stop supporting the economy now it would crash.”