LONDON (MNI) – The latest report from the International Monetary
Fund underlines that the U.K. should not deviate from its current
economic plan to reduce the deficit and reignite the economy, U.K. Prime
Minister David Cameron said Tuesday.
Speaking to the BBC Breakfast show, Cameron said: “What the IMF
say is that we should not abandon plans for making cuts in government
spending and also, regrettably in some cases, putting up some taxes to
get on top of our debt and deficit.”
Overnight, the IMF’s latest Fiscal Report again backed the UK
government’s current fiscal stance, but said it should be prepared to
resort to a “Plan B” if the economy continued to remain weak. In its
Fiscal Monitor, released Tuesday ahead of the IMF and World Bank
meetings in Tokyo, the IMF also downgraded the UK’s growth outlook for
2012 to -0.4%, down from +0.2%.
Cameron said the government needed to make sure the current plan
was kept firmly on track.
“What we need is not a “Plan B”, but make sure that every part of
“Plan A” is firing on all cylinders.”
He said the IMF downgrade of its forecast for the UK economy in
2012 largely brought it in line with other forecasters. But he said the
weak economy was not a UK only phenomenon.
“These are difficult times and they require tough measures. It is
difficult all the way across Europe, these are difficult times,” he
said.
Again Cameron dismissed plans from opposition politicians in the UK
to reign back on the austerity measures and introduce a “Plan B.”
“The worst thing to do when to have a problem of too much borrowing,
to much debt is to have more spending, more borrowing and more debt. You
can’t borrow your way out of a debt crisis,” he said.
“We don’t need “Plan B” which spells more borrowing, what we need
is to roll up our sleeves and do everything we can to make it easier to
start a business, grow a business, export from that business,” he added.
The prime minister noted that the UK had disappointing
growth figures, “but quite good jobs figures.”
“People said you would never have the growth in private sector jobs
to make up for the reduction in public sector employment,” he added.
However, echoing comments by UK Chancellor George Osborne made
Monday, Cameron said he believed the economy was healing, but “its a
very slow healing process.”
He also outlined measures the government was taking to help
businesses.
“If you think of all the things businesses and business
organizations have asked us to do, we are doing them. They have asked us
to cut high rates of business taxes – we’ve done that to make Britain
competitive,” he said.
“We have made it easier to employ people – and the good news in the
UK economy is there are a million net new private sector jobs compared
with two years ago.
Speaking to Sky News from Tokyo, a senior IMF analyst, Jorg
Decressin, said Cameron was correct to say the IMF continued to back the
government’s current policies.
Decressin said: “The policy mix in the UK, which consists of
adjusting fiscal policy, reducing deficits, at the same time supporting
the economy with very accommodative monetary policy is the right way to
go.”
–London bureau: +4420 862 7499; email: ukeditorial@mni-news.com
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