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 191.

    #165 therealist - In Germany "real wages haven't increased in 20 years"
    What has happened to "real prices"?
    Do their workers need Government benefits to be able to survive on their real low wages?
    Are their rail prices increasing by inflation + 3% per year?

  • rate this

    Comment number 190.

    Anyone for a food bank?

    This man is having himself on. I work hard and earn every penny I get. It's not enough to pay for this government's failings.

    What's the weather like on planet Osbourne?

  • rate this

    Comment number 189.

    Turning the corner ? More like stuck on a Milton Keynes roundabout !!

  • rate this

    Comment number 188.

    George did you buy your Sat Nav of Del boy..? because i don't think its that cushty...;)

  • rate this

    Comment number 187.

    Ha Ha, couldn't make this up. Well what do you expect from a guy who has had 1 months real work experience, data entry clerk oh and I nearly forgot a spell at folding towels in Selfridges. !!!

  • rate this

    Comment number 186.

    The economy has not turned the corner, July which is typically a surplus month for corporation tax wasn't. The masses are subject to massive wage suppression. Energy prices escalating, transport prices escalating, housing prices escalating. Until prices start coming down/ or wages starting increasing for the poorest. In addition we regained are AAA status from all credit agency's yet? NO!

  • rate this

    Comment number 185.

    Is Osbourne barking or what?

    Gas, electric, water, council tax, petrol/diesel, food are all going up. Pay is not.

    We're turning into the abyss, not a mere corner.

  • rate this

    Comment number 184.

    @149.Second rate second row
    Osborne & Cameron supported the Labour Governments economic policy 100%.............and were like rabbits in the headlights when the bank bail out was needed.

    Two posh boys playing games....its all a laugh to them....and when its over they will return to their multi-millionaire lifestyles.

  • rate this

    Comment number 183.

    I think the democratic view(based on HYS posters) is that George is wrong and in keeping with Cameron 'getting it' after 'listening' to the people, I think George should take note that he is not being believed and we have no faith in his policies..

  • Comment number 182.

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

  • rate this

    Comment number 181.

    168.ferafestiva - "....if Labour were still in power we'd be a LOT worse off - they'd have carried on borrowing..."

    Let's have a look at the evidence....

    A/. Tories borrowing billions...

    B/. Deficit dropped briefly but is stubbornly on the rise since...

    C/. Economy was growing nicely until May 2010...

    Things might not be perfect now if Lab had won but they'd not be SO BAD....

  • rate this

    Comment number 180.

    One word comes to mind regarding Osborne. "Gidiot"

  • rate this

    Comment number 179.

    If the economic mess was still being managed by Labour I guarantee things would be a lot worse. Those that whinge and expect instant results are the same people who cannot find work, lack skills and contribute nothing to our society. Those of us that contribute significantly to the public purse understand that turning things around will take time. We are seeing recovery.

  • rate this

    Comment number 178.

    People must learn to work harder in this country.

    You can down vote me but I don't care. You work hard you get money.

    If you have no work, spend every minute of your day finding it.

  • rate this

    Comment number 177.

    Yes we have turned the corner and are now on the road to hell - but don't worry Gideon and Co are doing just fine.

  • rate this

    Comment number 176.

    @107 Dan. Yours is the only comment that moves me. I mentor people and try to help them find work. Yes, it's very tough out there but you need to focus on what you are good at. Two desperate local lads couldn't find work but I've given them tools and they are making a decent living - in cash - hedging, fencing & tree surgery. Lots more examples. It can be done. Good luck!

  • Comment number 175.

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

  • rate this

    Comment number 174.

    Well he may believe this but I doubt there are many who agree with him, with food and energy prices soaring, wages dwindling, hundreds on zero hour contracts, thousand dependent on food banks and youth unemployment a national disgrace - pull the other one George it has bells on it

  • rate this

    Comment number 173.

    I wonder where Ed Balls is today?

    No doubt drowning his sorrows in lush surroundings as he wonders how he got it so wrong, that other people are also able to afford a few of the luxuries he affords himself.

  • rate this

    Comment number 172.

    Am I missing something another well loved English business sold to the chinese today Lucozade. Still low paid jobs to low to be able to afford own mortgage unless you have rich parents to back you up.Still underpaid so what has changed nothing only the obviouse with the conservatives rich getting richer I wonder how they can all afford to give themselves a pay rise because they take from the poor


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