UK Can Weather Financial Crisis - Gordon Brown PM
UK can weather financial crisis - PM
The United Kingdom is in a strong position to manage the financial uncertainty caused by the credit crunch, the PM has said.
Speaking to journalists during his monthly press conference, the PM said that a combination of sound fundamentals and low inflation would help the UK "weather the global financial storm". Tough decisions, particularly on public pay awards, had been key in manitaining stability he said.
The PM said:
"At all times we will take the tough long-term decisions to ensure, in testing times, the stability of the economy. Steering that course of stability is the essential foundation for meeting the long-term challenges of equipping our country for the future."
Mr Brown welcomed recent intervention by central banks in Europe and the US, with several institutions pumping cash into financial markets to help with liquidity. The Bank of England lent £10 billion to the City yesterday.
The credit crunch - a "gumming up" of interbank lending - was triggered when rising interest rates in the US resulted in many high-risk borrowers defaulting on their mortgage repayments and lenders suffering significant losses.
The Prime Minister said he had been in conversation with Chancellor Merkel, President Sarkozy and EU Commissioner Jose Manuel Barroso about the issue, and would soon talk with President Bush. The German Chancellor and the French President have also been invited to London for further talks.
Speaking at today's press conference, Mr Brown said that the decision to stage pay awards in the public sector, including the police, had been pivotal in keeping inflation down - the UK rate is currently 2.1 percent, almost at target, compared to 4.3 percent in the US and 3.1 percent in the Euro zone.
Chancellor Alistair Darling, who also attended the press conference, said that the UK economy was "growing well" through 2007 and that inflation had been kept under control despite rising commodity prices.