Osborne pledges to stick to Plan A
George Osborne has played down the impact of Britain's credit rating downgrade, saying there had been no "excessive volatility" in the markets.
Speaking in the House of Commons, the Chancellor said the FTSE had gone up on Monday, with 10-year government gilts remaining "near the lowest borrowing rates in our history".
He admitted Britain's credit rating was an "important benchmark" of economic crediblity, but said it was simply "one test" among many.
"This government’s economic policy is tested day in and day out in the markets, and it has not been found wanting today," Mr Osborne told MPs.
But Shadow Chancellor Ed Balls attacked Mr Osborne over the downgrade, and said the Government was now "besieged by calls from left and right" to change course.
“The Chancellor spent the last year saying ‘I must stick to my plan to keep the AAA rating’. Now it’s clear his warnings of disaster, of rising interest rates, of market mayhem if we downgraded, have not come true. What other excuse does he have for sticking to the plan?" Mr Balls said.
"The Chancellor needs to get out of his denial, and get a new plan on growth, jobs and the deficit that will actually work, or else the Prime Minister will need to get a new Chancellor."
Mr Osborne pledged to "redouble efforts" to cut Britain's deficit, and described the downgrade as a "stark reminder" of the problems faced by the country.
"We can either abandon our efforts to deal with our debt problems and make a difficult situation very much worse, or we can redouble our efforts to overcome our debts, make sure this country can earn its way in the world, and provide for our children a very much bright economic situation than the one we inherited from our predecessors," he said.