Rethinking the "austerity measures" in UK

100 leading economists tell George Osborne: we must turn to Plan B | Politics | The Observer: "Condemning the intransigence of the chancellor, George Osborne, as he pursues the coalition government's austerity programme, the economists write: "It is now clear that Plan A isn't working. Wave after wave of economic figures… have all concluded the British economy is faltering." And they warn: "Doing nothing is not an option."

They call on the government to consider a host of measures proposed by a body of academics and economists brought together by the left-leaning thinktank Compass. The proposals, in a manifesto entitled "Plan B: a good economy for a good society", will be launched in London on Monday. They include:"

■ An immediate halt to cuts, to protect jobs in the public sector.

• A new round of quantitative easing to finance a "Green New Deal" to create thousands of new jobs.

• Benefit increases to put money into the pockets of those on lower and middle incomes and give a boost to spending.

• A financial transaction tax to raise funds from the City to pay for investment in transport, energy and house building.

The call for a new approach comes as the UK economy's sluggish recovery shows signs of stalling altogether amid the fallout from the eurozone crisis. Consumer spending has fallen as wages fail to keep up with inflation, and low to middle-earners have endured the biggest squeeze on living standards for decades.

Ministers are bracing themselves for further bad news this week with the publication by the Office for National Statistics (ONS)of the latest growth statistics. It is anticipated that GDP will have grown by just 0.3% between July and September, representing a modest increase on the 0.1% in the previous quarter.

The letter from the economists, including former European Investment Bank consultant Dr Ha-Joon Chang urges the government to engage with new ideas on stimulating growth, and warns the chancellor that his policies may push the country into further deficit rather than erase the national debt.