Chief Secretary to the Treasury Danny Alexander said it will take time for Britain to return to “sustainable prosperity” and reiterated the government’s commitment to its budget-cutting program.
“Those were very disappointing figures that we saw last week,” he said in an interview with Bloomberg Television in London today. “It is going to take time to get the U.K. back to sustainable prosperity” and “a critically important part of that is to maintain the commitments that we’ve made to deal with the enormous budget deficit we inherited.”
Prime Minister David Cameron was forced to defend his government’s spending cuts last week after official data showed Britain’s economy slid back into its first double-dip recession since the 1970s. The U.K. was joined today by Spain, which has entered its second recession since 2009.
Alexander said low bond yields show investors still have confidence in the U.K. economy.
“They’re at one of the lowest levels they’ve ever been in our history,” he said. “That’s a reflection of the confidence that people have in investing in the U.K. because of the plan we’ve set out.”
Alexander’s comments echo those made yesterday by Cameron, who said the government won’t ease an austerity plan aimed at wiping out the bulk of a budget deficit equal to 8 percent of gross domestic product by 2017.
Cameron also told the British Broadcasting Corp. the euro area was “nowhere near” halfway through its debt crisis. Data today showed Spain’s gross domestic product fell 0.3 percent in the first quarter, the same as in the previous three months.
“We’ve set out a very comprehensive growth strategy,” Alexander said. “There are big changes we are making to support economic growth in the U.K.”
Alexander declined to comment when asked about a Sunday Times report that Goldman Sachs Asset Management Chairman Jim O’Neill was a candidate to replace Mervyn King as governor of the Bank of England next year.
“We’ll have to make a decision in due course,” he said. “I’m sure there are a lot of good candidates around.”
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