Osborne warns of 'hard choices' to fix economy
Britain cannot "run away from the hard choices it faces" on the economy, Chancellor George Osborne has warned.
He also signalled that he would hold firm against calls for him to ease up on his austerity drive.
With increasing fears of an unprecedented triple-dip recession after the UK economy recorded negative growth in the final quarter of 2012, Mr Osborne is coming under mounting pressure to change course.
IMF chief economist Olivier Blanchard said the Chancellor should "take stock" in his March Budget, when a move to a slower fiscal consolidation "may well be appropriate". London Mayor Boris Johnson has also urged Mr Osborne to "junk the rhetoric of austerity" to restore confidence in the economy.
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Asked about these comments, the Chancellor yesterday gave no indication of a change in his deficit-reduction strategy.
"Britain faces a difficult economic situation," he told the BBC.
"We have got problems at home, built up by this unbalanced economy, problems in our financial sector and the debts we have built up.
"And, frankly, we have got problems abroad with many of our export markets deep in recession in Europe.
"We have got to do the things in the short-term that will help – and we are investing in apprenticeships. Unemployment is falling at the moment.
"But we have also got to do the things that will help tomorrow and in the future and the high-speed rail announcement is part of an economic regeneration package.
"Anyone knows that in the end you have got to pay your way in the world.
"Britain has heavy debts, it is borrowing a huge amount every year. Unless we do something about that, that really will blight our country's economic prospects.
"The deficit is coming down. This Government is taking these difficult decisions. We are confronting these decisions.
"In the end, Britain can't run away from the hard choices it faces.
"We have got to invest in our future, we have got to keep up with other countries which are making all sorts of investments in their economies and we have got to deal with our debts because, in the end, if people don't believe you are going to pay your way in the world, nothing is going to be invested in."
Mr Osborne briefed the Cabinet at a meeting in Leeds yesterday on the latest economic figures, including last week's official estimate that GDP shrank by 0.3 per cent in the last quarter of 2012.
But there was better news on the unemployment front, with the jobless total falling to 7.7 per cent in the three months to November.