The Office for Budget Responsibility has published a letter sent to Number 10 by its chairman in which he took exception to claims made by David Cameron.
In the letter, Robert Chote criticised the PM's claim that austerity measures were not responsible for a dip in growth:
To date our forecasts have used 'multipliers' that imply that every £100 of fiscal consolidation measures reduce GDP in that year by around £100 for capital spending cuts, £60 for welfare and public services cuts, £35 for increases in the VAT rate and £30 for income tax and National Insurance increases, with the impact diminishing thereafter.
We believe that fiscal consolidation measures have reduced economic growth over the past couple of years, but we are not yet persuaded that they have done so by more than the multipliers we use would suggest.
Mr Chote included the following quote from Mr Cameron's comments in his letter to Number 10:
As the independent Office for Budget Responsibility has made clear growth has been depressed by the financial crisis, the problems in the Eurozone and a 60% rise in oil prices between August 2010 and April 2011. They are absolutely clear that the deficit reduction plan is not responsible. In fact, quite the opposite.
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