Downing Street Says

» Friday, May 13, 2011

Economy

Asked if the government was concerned that the French and German economies were growing faster than the UK’s, the PMS said that it was good news because mainland Europe was our major trading partner.

The PMS said that as we sought to rebalance our economy we would need to export more. This was reliant on demand from countries like France and Germany. The PMS went on to say that if you looked at the situation in the UK, people had to remember that we had the largest deficit, unprecedented levels of public and personal debt and a very significant banking crisis. We had always been clear that there was a lot of work to do on rebalancing the economy and getting it moving again.

Asked if the large deficit was the reason why we were not in the same position as France and Germany, the PMS said over the past few years we faced particular problems in the UK. We were particularly affected by the banking crisis because of the large size of our financial sector, we had a particularly large housing boom and we had particularly high levels of personal debt. There were a whole range of factors that we were seeking to address.

Asked if the Government was worried that the deficit wouldn’t be wiped out, the PMS said the OBR’s forecast at the time of the Budget showed the Government would meet its fiscal mandate a year early. The PMS went on to say that gave us confidence that we would meet our fiscal objectives.

Asked what lessons could be learned from France and Germany, the PMS said one thing that Germany did was deal with it’s deficit. They were also, arguably, less reliant on a single sector and had a broader industrial base, something we were trying to achieve in rebalancing our economy.

Asked if the Prime Minister was concerned that we were the sick man of Europe, the PMS said we did have particular problems in this country. The PMS went on to say we’re trying to put in place a strategy that meant we would be in a much better position in the years to come.

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Economy

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