He said that part of the Government's motivation was to send the message that the UK was not facing a debt crisis like Greece, even though that was never a likely prospect.  A spokesman for the Treasury said: "The UK is forecast to have the highest borrowing in the G7 this year and is borrowing one pound for every four it spends. The Budget set out a plan to accelerate the reduction of the deficit and restore confidence in the economy, and was welcomed by the OECD."  NIESR was also unconvinced that there is sufficient evidence to back up the Coalition's claim that fiscal consolidation is most successful when led by spending cuts.  "It is not clear that spending-led consolidations have recently been better than tax-led ones. Hence, we must see the choice of a spending -led consolidation as a political one based on a belief in the small state," Mr Barrell said.  He said the decision to ring-fence health from cuts was not justified, and that the Government had wasted the opportunity to announce deeper real wage cuts in the public sector.  NIESR raised its growth forecast for 2010 to 1.3pc from 1pc in April, but said that growth would be weaker in the second half compared with the first half. It forecast a 0.1pc and 0.3pc rise in quarter-on-quarter gross domestic product in the third and fourth quarters, compared with 0.3pc and 1.1pc in the first and second quarters.  NIESR downgraded its forecast for 2011 to 1.7pc from 2pc, noting that the Coalition's austerity measures would hamper growth. The institute also said that inflation is likely to remain above the 2pc target into early 2012, because of the Government's decision to raise VAT to 20pc from 17.5pc.
There was no urgent need for the austerity measures announced in the    Government's "emergency Budget" in June, a respected research    institute said.