✂ Fed’s first rate cut since 2020: Use our free Stock Screener to find new opportunities fastExplore for FREE

UPDATE 1-UK's Darling says growth to resume by year-end

Published 05/19/2009, 09:33 PM
Updated 05/19/2009, 09:48 PM

* Says won't change forecasts

* Says G20 stimulus package key to recovery prospects

* Says no hurry to sell government's banking stakes

LONDON, May 20 (Reuters) - Britain is set to resume growing by the end of 2009, and the government does not plan to alter its economic forecasts, UK finance minister Alistair Darling told the Times newspaper in an interview.

"I an not going to change my forecasts," the Times quoted Darling as saying in its Wednesday edition.

"I remain confident that we will see a return to growth at the turn of the year."

The UK government expects the British economy to expand by 1.25 percent in 2010 after shrinking by 3.5 percent this year. Its predictions are more optimistic than some other forecasts, with the International Monetary Fund expecting a further 0.4 percent contraction next year.

However, Darling said Britain's recovery prospects will depend on whether other members of the Group of 20 world economies fully implement the stimulus package they agreed last month, and on whether British banks honour commitments to increase credit availability.

"I remain confident that we will come through this, provided we ensure that we deliver what we set out at the G20, and what we are doing ourselves, particularly in relation to ensuring that the bank-lending agreements are fully implemented," he told the Times.

Darling also said the government was in no rush to sell its stakes in partly nationalised banks, as its priority was to dispose of them at a good price.

"I am determined that we get the best possible deal for the taxpayer, so I am in no hurry there," he told the Times.

On Tuesday, sources told Reuters that Britain had held talks with investors to gauge their interest in buying the government's bank stakes, acquired as part of a multibillion pound bailout of the banking sector last year. [ID:nLJ294758]

Darling also moved to soothe fears that official figures on Tuesday showing a bigger than expected fall in British inflation were a sign the economy is heading towards deflation.

The decline in inflation "is in line with expectations. Deflation is quite different," he said. (Reporting by Myles Neligan; Editing by Gary Hill)

Latest comments

Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.
© 2007-2024 - Fusion Media Limited. All Rights Reserved.