Downing Street Says

Put that the Prime Minister had said earlier today in his Q&A that money that was borrowed would be paid back with tax receipts and was part of this him seeking to reassure people that the Government was not going to go on a big borrowing binge, the PMS replied that it was about making it clear that we had a comprehensive approach to dealing with the economic situation that we re faced with.

We had already taken significant action in relation to banks. The Bank of England had cut interest rates and fiscal policy had a role to play as well and that was what the Prime Minister had been talking about this morning. It was about demonstrating that we were using all possible instruments at our disposal, in order to get the country through this difficult period.

Asked if the Prime Minister was confident that the downturn was going to be pretty short and the economy would pick up soon, the PMS said that we could be reasonably confident that the economy would pick up. The question of course was about the timing and that was a matter for the Treasury and their forecast in the Pre-Budget Report. Asked why he was confident that the economy would pick up, the PMS said that he didn t think anyone would expect the economy to continue to decline indefinitely.

We were expecting that there would be a recovery. The fundamentals of our economy remained strong and we were a resilient economy. As the global economy moved through this phase and moved back into upturn, then we would expect Britain to benefit.

Asked whether the Prime Minister expected unemployment to rise significantly, the PMS said that we did not forecast unemployment, as people would know. Clearly these were going to be tough and challenging times for the economy in the period ahead. We stood ready to do whatever was necessary in order to help people and help businesses get through this difficult period.

Asked if the Prime Minister was saying that taxes would have to go up in the period when the economy started to pick up again, the PMS replied that the Prime Minister was not making any predictions on tax or spending for the future. We would set out our plans in the normal way in future Budgets and future PBR s. The Prime Minister referred to tax receipts specifically.

Asked for guidance on the Mais Lecture, the PMS said people should wait for the speech and talk to the Treasury. Asked about a note passed to the Prime Minister in this morning s Q&A, the PMS said he did not think the Prime Minister needed prompting from anybody in terms of what he says.

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» Monday, October 27, 2008

Economy

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