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No plan B from UK PM despite rating cut

Thursday, March 07, 2013 - 00:37

March 7 - British Prime Minister David Cameron promises to stick to his deficit reduction plan despite a lack of economic growth and loss of his country's top-notch credit rating, saying Britain would plunge ''into the abyss'' if he changed course. (ROUGH CUT - NO REPORTER NARRATION)

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(ROUGH CUT - NO REPORTER NARRATION) (SOUNDBITE) (English) BRITISH PRIME MINISTER DAVID CAMERON, SAYING: "We will not be able to build a sustainable recovery with long-term growth unless we fix this fundamental problem of excessive government spending and borrowing that undermines our whole economy." "Dealing with the deficit gives us the credibility in world markets to maintain low interest rates. And it is, I think, hard to overstate the fundamental importance of low interest rates for an economy as indebted as ours. And also hard to underestimate the unthinkable damage that a sharp rise in interest rates would cause." British Prime Minister David Cameron promises to stick to his deficit reduction plan despite a lack of economic growth and loss of his country's top-notch credit rating, saying Britain would plunge "into the abyss" if he changed course. Defending his strategy from critics who argue too much austerity is killing off growth, Cameron said the Bank of England had to play its part in getting the economy growing and said the government had to curb spending and borrowing. Cameron spoke to an audience in Yorkshire, England. His comments came after a top minister in his junior coalition partner - the Liberal Democrats - publicly questioned his focus on cutting debt, suggesting it may be time to borrow more to invest in infrastructure. Speaking ahead of a March 20 budget that will be dissected by the markets and ratings agencies alike, Cameron said there were signs his economic policies were beginning to work, saying it was imperative to "hold firm to the path". Borrowing to spend more would jeopardise the nation's finances, he added, saying it was vital to maintain fiscal credibility to keep interest rates low to ensure householders and small businesses could borrow. The state of Britain's anaemic economy is linked to Cameron's own political fortunes. His advisers are banking on an economic recovery being under way by the time of the next general election in 2015, allowing Cameron to whittle away the opposition Labour Party's lead in the opinion polls and win. But for now the economy appears stuck in a rut and could already be in its third recession since 2008, while public debt is set to carry on rising for another three years despite some public spending cuts.

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No plan B from UK PM despite rating cut

Thursday, March 07, 2013 - 00:37