UK economy is turning corner, George Osborne says


George Osborne: "There are still those calling for the government to abandon its economic plan... but to do so would be disastrous"

The UK economy is "turning a corner", Chancellor George Osborne has said in a speech in London.

Mr Osborne cited "tentative signs of a balanced, broad based and sustainable recovery", but stressed it was still the "early stages" and "plenty of risks" remained.

Mr Osborne said that recent months - which have seen more upbeat reports on the economy - had "decisively ended" questions about his economic policy.

Labour has dismissed the comments.

The speech comes ahead of the Conservative Party conference later this month, and after a number of forecasts and surveys pointed to an acceleration in the UK's economic recovery.

Revised gross domestic product figures showed the UK economy grew by 0.7% in the second quarter of the year, with predictions it could reach 1% for the third quarter.

And last week the OECD economic agency sharply increased its growth forecast for the UK economy this year to 1.5% from an earlier estimate of 0.8%.

The Conservatives' fear is that in future voters may not accept that current policies need to be maintained

Mr Osborne said: "The economic collapse was even worse than we thought. Repairing it will take even longer than we hoped.

"But we held our nerve when many told us to abandon our plan. And as a result, thanks to the efforts and sacrifices of the British people, Britain is turning a corner.

"Of course, many risks remain. These are still the early stages of recovery. But we mustn't go back to square one. We mustn't lose what the British people have achieved.

"This is a hard, difficult road we have been following. But it is the only way to deliver a sustained, lasting improvement in the living standards of the British people."

The government's "economic plan is the right response to Britain's macroeconomic imbalances and the evidence shows that it is working", he said, in his address to an audience of academics, think tanks and businesses.

Start Quote

Those in favour of a Plan B have lost the argument”

End Quote George Osborne

Mr Osborne said that those who advocated an alternative economic path could not explain recent improvements in the economic data.

And "the last few months have decisively ended" the idea that the scale and pace of his measures were to blame for much slower than projected growth over recent years, he added.

"Those in favour of a Plan B have lost the argument," he said.

Heeding calls to abandon the government's economic plan in order to spend and borrow more would have undermined the recovery and "would be disastrous" now, Mr Osborne said.

He pledged to remain "vigilant" to threats from abroad - including growing instability in the Middle East pushing up the oil price and a fresh eurozone crisis - as well as at home.

John Cridland, director-general of business lobby group CBI, said the economy was gathering some momentum, business confidence was rising and he expected growth to continue into next year.

"We have always said that deficit reduction should be at the top of the government's 'to-do list', but it must be coupled with an unrelenting focus on growth-boosting measures like infrastructure projects," he said.

'Rewrite history'

Start Quote

The chancellor isn't declaring victory on the recovery just yet - he's too careful for that. But he is declaring victory over Ed Balls”

End Quote

And he dismissed claims he was encouraging "the wrong sort of growth" - led by debt-fuelled consumer spending - insisting the evidence suggested "tentative signs of a balanced, broad based and sustainable recovery".

He said there were many tough decisions still to be taken and that "the only sustainable path to prosperity is to reject the old quick fixes and stick to the course we have set".

Labour accused Mr Osborne of "extraordinary complacency".

Opposition leader Ed Miliband told the BBC that the chancellor was "saying to people that he has saved the British economy at a time when, for ordinary families, life is getting worse".

"If ever you wanted proof that the government is out of touch with most people, that it is on the side of the few, George Osborne has provided it today," he added.


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  • rate this

    Comment number 91.

    The economy is controlled by peoples' mindsets and peoples' mindsets are controlled a lot by media. If an investor thinks an economy is good he/she is more likely to invest. If the media would stop scaremongering we probably would be in a better shape. Of course this is not the only factor, but still worth considering. Just look at China and their state controlled media then look at India.

  • rate this

    Comment number 90.

    Great, according to Mr O we've turned the corner 4 times now, so I think we're back where we started!

  • rate this

    Comment number 89.

    Turning a corner for whom?

    For 90% of us it's round the bend.

  • rate this

    Comment number 88.

    Typical Tory economic management, first drive the economy into a deep recession then claim economic success when things pick up. In the mean time most people are left poorer. Of course things would have picked up anyway and sooner without any input from the ConDems.
    Will it be Young Gideon or Muppet Waldorf Cable who will go on about the 'Green Shoots of Economic Recovery'.

  • rate this

    Comment number 87.

    Yes, we've just left Mayfair and landed on Old Kent Rd ...

  • rate this

    Comment number 86.

    The rich have turned the corner into an even richer place but those with no hope of buying any property or paying even for their living expenses have turned the corner into a dark place.
    CEOs are voting themselves more and more cash for doing nothing more than attend meetings in smart suits and screw things up.
    UK plc is going to the dogs.

  • rate this

    Comment number 85.

    The economy continues to turn corners under Gideon. Cleverer Chancellors than he would realise that when you're trapped in a maze? It's a good time to look for an alternative route. The corners he is turning are bringing him back to where he started. Bereft of money, workable policies and the support of a majority of electors.

  • Comment number 84.

    This comment was removed because the moderators found it broke the house rules. Explain.

  • rate this

    Comment number 83.

    I'm pretty sure my 2013/2014 tax return isn't going to mirror this statement...

  • rate this

    Comment number 82.

    Just massaging the figures as usual... I have been unemployed for nine months now- my second redundancy in four years... Convince me and many others like me - two degrees and not one whiff of an interview or a basic job!

  • rate this

    Comment number 81.

    Any slight improvement in the UK economy has been achieved on the backs of working people, who have received below inflation pay increases whilst having to pay above inflation price increases on essential items.

    Pensioners have also suffered with delayed state pensions and ridiculously low (below inflation) interest rates on their savings.

    Only the rich have come through this downturn unscathed.

  • rate this

    Comment number 80.

    Labour said The french socialist Government and there polices were the way forward....
    Maybe they should eat them words i remember them.
    And I remember the note saying there is no money left.

    -And I remember Osborne saying the economy would have recovered to 2008 Levels and the debt halved by 2013.

    At least the note was True!

  • rate this

    Comment number 79.

    One corner down, three more to go...
    ...then we'll be back where we started.


  • rate this

    Comment number 78.

    Sadly, around the corner is lurking several corporations wearing balaclavas... ;)

  • rate this

    Comment number 77.

    GDP figures which fly in the face of real terms decreases in wages and a house price rise based on a government backed bubble do not mean we are doing well as a country. The only people who seem happy with this are the George Osborne and his mates in the city who are making more money than ever - thanks to the taxpayer.

  • rate this

    Comment number 76.

    Tell that to the people at food banks, victims of the bedroom tax no corner turned for them.

  • rate this

    Comment number 75.

    Signs are there that business is recovering our orders are up and customers appear to be more positive about the economy and making plans to invest.
    Just need the unions to start talking about strike action just as things are improving, members want more money because a few businesses are seeing an upturn. I am afraid in our company it will be at least 18 mths before we even consider wage rises.

  • rate this

    Comment number 74.

    I love the way Labour are criticising the government for rewriting history. What total hypocrisy! Labour have long since rewritten history to pretend that the 2008 crash was nothing to do with their criminally inept mismanagement of the economy. As a working class taxpayer I'd rather have the coalition running the economy than ed (there's no way that's a real name) balls.

  • rate this

    Comment number 73.

    You know what happens when you keep turning corners - you end up back where you started.

  • rate this

    Comment number 72.

    58. ahwasright
    I hope the economy is not getting better as it will encourage yet even more immigrants to come here.
    It's probably thanks to the immigrants that the economy is getting better.


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