The U.K.’s Chancellor of the Exchequer George Osborne made a statement to parliament today on the U.K. economy. He is defending his economic plans to opposition politicians and reiterates the Bank of England warnings that the outlook is worsening amid a deepening debt crisis in Europe.
The following are highlights of his statement:
ON MARKET TURMOIL
“Sadly, Britain is not immune to these market movements.”
ON DEFICIT CUTS
“Ours is an absolutely unwavering commitment to fiscal responsibility and deficit reduction.”
ON GLOBAL RECOVERY
“The recoveries from this sort of debt-driven, balance sheet recession was always going to be choppy and difficult and we warned that would be the case.
“The whole world now realises that the huge overhang of debt means that the recovery will take longer and be harder than had been hoped.”
ON BANK CAPITALISATION
“First, we must continue to put our own house in order. I spoke again yesterday to Mervyn King, and I can confirm the assessment of the Bank, the FSA and the Treasury, that British banks are sufficiently well capitalised and holding enough liquidity to be able to cope with the current market turbulence. We have in place well developed and well rehearsed contingency plans.
“We must also continue to implement the fiscal consolidation plans that have brought stability to our bond markets.”
“While our stock market has fallen like others, there has been one striking difference from many of our European neighbours: the market for our government bonds has benefited form the global flight to safety.
“UK gilt yields have come down to around 2.5 percent — the lowest interest rates in over 100 years.”
CONSEQUENCES OF A EURO BREAK-UP
“The break-up of the euro would economically disastrous, including for Britain, and so we should accept the need for greater fiscal integration in the euro zone, while ensuring that we are not part of it.”