Osborne warns of 'choppy' recovery
George Osborne has admitted that forecasts for the British economy have been downgraded following a slew of poor data.
But the Chancellor insisted the Government would stick to its tough deficit reduction plan despite the evidence of a sharp slowdown over recent weeks.
In a speech at Lloyd's of London, Mr Osborne said: "We warned repeatedly that the recovery would be choppy. And we set in train a plan that was comprehensive and clear in its vision, but also flexible enough to withstand shocks along the way.
"A plan for fiscal responsibility to bring unsustainable government borrowing under control, so that monetary activism can allow interest rates to stay lower for longer.
"The plan we have set out is designed in tough times for tough times. It is the rock of stability upon which any sustainable recovery depends and we will hold to it."
Signalling that UK growth forecasts will be lowered when he delivers his autumn statement to Parliament on November 27, the Chancellor said recovery from financial crises were "slower and choppier" than other recessions.
"So, while we have all had to revise down our short-term expectations over recent weeks, the only people who should be fundamentally re-examining their view of the world are those who thought that this time was different," he added.
"Those whose plans depended on unrealistic assumptions of a rapid return to business as usual and a continuation of forgiving financial market conditions.
"This Government has never thought that this time would be different. We understood right from the beginning that the world of the boom years had changed beyond recognition."
Mr Osborne said Britain was benefiting from being "ahead of the curve" in dealing with the deficit.