Cameron stcks to austerity course
(03-07 21:43)
British Prime Minister David Cameron vowed to maintain a course of budget austerity, rejecting calls to focus more on economic growth despite an embarrassing credit ratings downgrade.
Cameron argued that Britain is beginning to see signs of progress in debt reduction thanks to his government's tough spending cuts and tax increases and said changing that approach risks plunging Britain “back into the abyss,’’ AP reports.'
“There are signs that our plan is beginning to work,'' he said in a speech in London.
Cameron noted the budget deficit was decreasing and that borrowing rates on bond markets were at record lows, an indication international investors are confident the country will be able to pay off its debts. He also cited signs of a recovery in exports.
“The very moment when we're just getting some signs that we can turn our economy round and make our country a success...is the very moment to hold firm to the path we have set,’’ he said.
Cameron's Conservative Party and its junior coalition partner, the Liberal Democrats, have pledged to cut Britain's debts, which had piled up amid the global financial crisis and costly banking bailouts. The government has pushed through a grueling austerity drive, with cuts to public-sector jobs and welfare payments.
But the budget cuts have also hurt the economy, which is close to falling back into recession for a third time in just under four years.
Cameron's defense of his economic policy follows a bruising set of economic developments in recent weeks.
Moody's Investor Service downgraded the UK's credit rating last month, saying that sluggish economic growth would hinder the government's ability to control rising debt levels and deal with any new financial shocks. Two other ratings agencies, Fitch and Standard & Poor's, have Britain on negative outlook, signaling they too could lower the country's credit rating.
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