Pros Weigh in on Severe UK Spending Cuts
The UK government unveiled a severe five-year austerity plan this week, which included sharp cuts to public sector jobs and benefits. The plan, though widely expected, divided opinion with some commentators claiming it put the country's recovery at risk.
Cuts and Growth Go 'Hand in Hand'
"This budget is very far sighted… if we don't tackle (the deficit) it will lead to much worse consequences for growth, for employment, for interest rates in this country," UK Treasury Chief Secretary Danny Alexander told CNBC.
"It is not a choice between economic growth and reducing the public deficit, the two go hand in hand," he said.
Private Sector Demand
The private sector will be able to soak up some of the job losses because there is already a demand for those skills, but it will take time, Clive Davis, director of recruitment firm Robert Half, told CNBC.com.
"This freeing up of staff is not going to happen over night," Davis added. "You need to have the staff in place to take advantage of business opportunities."
Spending Cuts to be 'Brutal'
"It’s going to be pretty brutal… In real terms it’s a cut of 4% overall which is on average about one percent per year,” Ruth Lea, economic advisor at Arbuthnot Banking group, told CNBC.
UK Losing Momentum
"No-one disputes that we need to get our borrowing down… but in a way that doesn't damage our prospects for growth," Alistair Darling, former UK Finance Minister, told CNBC. "The momentum that there was in the economy appears to be going backwards," he added.
Britain Must Get Budget Back in Synch
“Over the last ten years, we’ve been spending £5 for every £4.5 of tax revenue we get, so therefore that 50 pence has been financed through debt….what they (the UK government) are doing is getting the budget back in synch again: spending less than what we get in terms of tax revenues,” David Kuo, director of The Motley Fool, told CNBC.
Too Much Too Quickly?
"I am very concerned that this is too much too quickly… I think we have to get our debts under control…and in the aftermath of a credit crunch…you’ve got to move with extreme flexibility," Will Hutton from The Work Foundation told CNBC.