Brown: I will save economy
Prime minister Gordon Brown has pledged he will save the UK’s economy despite the gloomy international outlook.
“There are many people who could take over but I think I can steer this economy through difficult times,” he told the BBC.
“I have done it before and I can do it again.”
The prime minister made the comments ahead of his monthly media press conference later today.
The comments follow widespread concern over Labour’s economic competence. Tuesday’s mini-budget, in which the chancellor borrowed £2.7billion, brought the government perilously close to its golden rule of never surpassing 40 per cent borrowing. This was then followed yesterday by a statement from Bank of England governor Mervyn King which put inflation well above the level the Treasury has forecast.
Mike Brewer, senior researcher at the Institute for Fiscal Studies (IFS) told politics.co.uk: “The Treasury predicted net debt was going to reach 39.8 per cent. That’s two per cent below their golden rule. On Tuesday he said he was going to borrow £2.7 billion more.
“So if nothing changes in the forecast they’re OK. But in reality forecasts aren’t that accurate. The government has about a 50-50 chance of keeping to its rule.”
Yesterday’s Bank of England figures predict inflation at three per cent for the rest of the year, with the government set to miss its two per cent target until 2011.
The Bank’s central projection is for growth of around 1.5 per cent next year, half the Treasury’s current prediction. If growth remains that sluggish, Tuesday’s £2.7 billion injection would irretrievably breach the government’s golden rules on public finances.
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