Public spending cuts ‘could cause havoc’

CUTTING public expenditure or public sector wages or employment could cause havoc for the Irish economy, a top economist warned yesterday.

Such action could lead to a prolonged depression, warned David Blanchflower, professor of economics at Dartmouth College in the US.

Prof Blanchflower, was until recently a member of the Bank of England’s monetary policy committee and has long warned of a surge in unemployment and youth joblessness in particular.