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Osborne defends economic strategy

Osborne defends economic strategy

George Osborne has defended his economic strategy following the decision by ratings agency Moody's to put the UK on a negative outlook.

The move puts pressure on the Chancellor, who has staked much political capital on the Government's determination to tackle its debts. It also points to the possible downgrade of Britain's AAA status.

But Mr Osborne said the warning from Moody's underlined the need to keep dealing with Britain's debt.

Speaking to the BBC this morning, he said: "For me it was a reality check for the whole political system that Britain has to deal with its debts, that we can't waver in the path of dealing with our debts... It's yet another reminder that Britain doesn't have some easy route out of the economic problems that have accumulated over the last decade."

Labour has seized on the decision to put the UK on a negative outlook. Shadow Chancellor Ed Balls called for a renewed focus on jobs and growth, saying the decision was a warning to Mr Osborne and his deficit reduction strategy:

"A change of course is needed... It is a disaster for our country and the world to make the mistake of the 1930s. The ratings agencies are starting to get there. I'm afraid our Chancellor is still in complete denial about the state of the economy and the failure of his policies."

But the Chancellor insisted: "The idea that I've abandoned growth is nonsense. Of course I want growth. Of course I want to see unemployment fall. That's what I spend every day of my life trying to bring about. But the truth is this: that if you don't have confidence in a country's ability to pay its debts, as you have seen with plenty of other European countries, then you get negative growth, rising unemployment and no prospect of recovery."

John Longworth, director general of the British Chambers of Commerce, called on George Osborne to "pull out all the stops" to drive economic growth. "The Moody's report underlines the fact that ministers must move from rhetoric to real, tangible action and delivery on all fronts to support business," he said.

Steve Davies, of the pro-free market think-tank the Institute for Economic Affairs, accused politicians of "cherry-picking" elements of the Moody's report.

“Both the Government and the opposition at the moment are trying to cherry-pick bits from this Moody’s report that suit them and ignore the bits that don’t."

"The Government is correctly saying we need to get the deficit under control, but they’re brushing off the criticisms of their lack of a growth policy."

Green Box: Osborne defends economic strategyClick to open

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