Osborne warns over economy forecast
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 29, the Chancellor said recovery from financial crises were "slower and choppier" than other recessions.
He added Britain was benefiting from being "ahead of the curve" in dealing with the deficit.
However, shadow chancellor Ed Balls said: "The British recovery was choked off last autumn, well before the global market turmoil we have seen in recent weeks.
"It's time George Osborne got out of his denial and admitted that Britain now faces a growth crisis, as a senior Minister let slip this week. And he should listen to the head of the IMF and one of the largest investment funds in the world who have warned that cutting too far and too fast risks economic recovery."