The Ireland bailout announced by the EU and IMF also included a bilateral loan by the United Kingdom to Ireland. UK chancellor, George Osborne says, this is a one-off and won’t be offered to countries like Portugal or Spain. Speaking to CNBC’s Maria Bartolemo Osborne elaborated further on the growth picture in the UK and the situation in Europe.
Q: You have said the UK is out of the danger zone and that the economic recovery is on track. Break that down for us. What is going right in the UK right now?
A : Well, we have addressed two big questions which were hanging over the United Kingdom when this new government took office in May. One was can we pave our way in the world? I inherited, as chancellor, the largest budget deficit in the G20 and we have taken a series of steps, increased some consumption taxes and had some cuts in public expenditure, which have put us on a path to eliminate the structural deficit in a period of four years.
We have addressed that question: Can Britain pave its way in the world? And, indeed, the credit rating agencies that have put us on a negative watch have taken us off and affirmed our AAA rating.
But we have also addressed the other question which people were asking, which is, ‘okay, you could do that, but can you also grow?’ The economic forecast for the UK, showed that the UK has got a path of sustainable growth over the next four-years of above 2% a year. I think some of the measures we have taken, for example, reduce business taxes even at a time of fiscal consolidation, have helped send that message that Britain is open for business.
