GEORGE Osborne launched a staunch defence of his economic policy yesterday after Labour’s Ed Balls attacked him for losing the UK’s triple-A credit rating from agency Moody’s.
The chancellor had previously staked his reputation on the top credit rating, arguing that his deficit reduction plan would safeguard the seal of approval from the agency.
But the UK was downgraded to double-A on Friday night, leading Balls to attack Osborne’s failings and the UK’s lack of economic growth.
“The plan has failed. Businesses, families and pensioners are struggling, our economy has flat-lined and, as a result, government borrowing is set to be £212bn more than planned – but despite all this, the chancellor has spent the last year saying he had to stick to his plan in order to keep the triple-A rating,” argued Balls.
“The chancellor needs to get out of denial and get a new plan that will actually work on growth, jobs and the deficit.”
Osborne hit back that interest rates on UK bonds remain near to record lows and the stock market is strongly up this year, indicating investors are not worried by the downgrade.
And he said Labour is to blame for the UK’s budget deficit, and Balls has no plan to improve the situation.
“His answer to a debt crisis is to borrow more. His answer to too much borrowing is to add to it. He is responsible for the mistakes that got Britain into this mess,” Osborne said.
Meanwhile other MPs worried the ongoing economic stagnation is pushing sterling down against the euro, boosting inflation. The pound has fallen more than six per cent this year.