Spending cuts 'should be eased'

Britain's economy will fall into recession in the first half of the year and the Government needs to ease up on its tough package of spending cuts, an influential think-tank has warned.

The UK economy will shrink 0.1% in 2012 as cash-strapped households tighten their purse-strings and nervous businesses hold back on investment, said the National Institute of Economic and Social Research (Niesr).