David Cameron’s office said the government is sticking with its existing plans to reduce the budget deficit after the prime minister told British lawmakers that “further and faster” cuts were required.
Cameron was referring to the extension until 2018 of the budget squeeze announced by Chancellor of the Exchequer George Osborne in December rather than expressing a desire for further action, according to his office. Cameron made the comment today as he defended his economic strategy in the wake of Moody’s Investors Service stripping Britain of its top credit rating last week.
“This credit rating does matter,” Cameron told lawmakers in the House of Commons in London, when asked about the downgrade. “It demonstrates that we have to go further and faster on reducing the deficit.”
Osborne said as far back as 2010 that he should be judged on his ability to protect Britain’s top investment grade as he mapped out the toughest austerity program since World War II. Gilts have tumbled this year amid signs government is struggling to reach its deficit-reduction targets.
Cameron said U.K. borrowing costs are still at record lows, even after the downgrade.
“While I don’t deny for one second the importance of the ratings agencies, the most important test, which is one we face day in, day out at the market, is the rate of interest at which we borrow,” Cameron said.
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