This article is from the source 'bbc' and was first published or seen on . It will not be checked again for changes.
You can find the current article at its original source at http://news.bbc.co.uk/go/rss/-/1/hi/business/7338056.stm
The article has changed 8 times. There is an RSS feed of changes available.
| Version 1 | Version 2 |
|---|---|
| Darling 'optimistic' on economy | Darling 'optimistic' on economy |
| (40 minutes later) | |
| The Chancellor Alistair Darling has defended his forecast after UK economic growth was downgraded by the International Monetary Fund (IMF). | The Chancellor Alistair Darling has defended his forecast after UK economic growth was downgraded by the International Monetary Fund (IMF). |
| Speaking on Radio 4's Today Programme, Mr Darling said that "there were grounds for optimism" despite the "unprecedented shock to the economy." | Speaking on Radio 4's Today Programme, Mr Darling said that "there were grounds for optimism" despite the "unprecedented shock to the economy." |
| Mr Darling said that the UK still had a "strong economy that had proved remarkably resilient" in the slowdown. | Mr Darling said that the UK still had a "strong economy that had proved remarkably resilient" in the slowdown. |
| He said the IMF had downgraded the UK by less than other major economies. | He said the IMF had downgraded the UK by less than other major economies. |
| The IMF's World Economic Forecast, released later on Wednesday, is expected to say that the world economy will grow much more slowly than previously thought, led by a much deeper and longer slowdown in the US. | The IMF's World Economic Forecast, released later on Wednesday, is expected to say that the world economy will grow much more slowly than previously thought, led by a much deeper and longer slowdown in the US. |
| Better placed | Better placed |
| But the Chancellor insisted that the UK was better placed than other countries to cope with the downturn. | But the Chancellor insisted that the UK was better placed than other countries to cope with the downturn. |
| We need to do everything we possibly can to help people through what is undoubtedly a difficult period Alistair Darling Credit crunch 'to cost $1 trillion'Bank tipped to cut interest rates | We need to do everything we possibly can to help people through what is undoubtedly a difficult period Alistair Darling Credit crunch 'to cost $1 trillion'Bank tipped to cut interest rates |
| "The IMF has downrated every country's growth forecast in the light of what's been happening in the world economy. However, they have lowered their expectations in relation to us by less than other countries," he said. | "The IMF has downrated every country's growth forecast in the light of what's been happening in the world economy. However, they have lowered their expectations in relation to us by less than other countries," he said. |
| Mr Darling said he was sticking by his forecast made in last month's Budget that the UK economy would grow by between 1.75% and 2.25% in 2008 and by 2.25% to 2.75% in 2009, substantially above IMF projections. | Mr Darling said he was sticking by his forecast made in last month's Budget that the UK economy would grow by between 1.75% and 2.25% in 2008 and by 2.25% to 2.75% in 2009, substantially above IMF projections. |
| Any sharper slowdown in the UK economy would also put a big hole in the public finances, which are already expected to be £45bn in the red. | |
| On Tuesday, the IMF warned that the losses from the credit crunch were likely to be in the order of $1 trillion (£500bn), putting severe pressure on banks and other financial institutions. | On Tuesday, the IMF warned that the losses from the credit crunch were likely to be in the order of $1 trillion (£500bn), putting severe pressure on banks and other financial institutions. |
| But Mr Darling said that coordinated action with other countries could blunt the impact of the credit crunch. | |
| "I do remain optimistic that provided we can take action, not just in this country but.. with other countries,...provided we can take the right action,.. then we can ensure that the economy stays growing as it has done for the last few years." | |
| Help for housing | Help for housing |
| One consequence of the credit crunch has been that UK banks have found it difficult to raise funds for mortgages, and have cut back sharply on their lending to home owners | |
| As a result, house prices are now falling across most of the UK. On Tuesday the Halifax said that its house price index fell in March by the largest amount since 1992. | As a result, house prices are now falling across most of the UK. On Tuesday the Halifax said that its house price index fell in March by the largest amount since 1992. |
| The Bank of England's Monetary Policy Committee is widely expected to cut interest rates on Thursday from the current level of 5.25%. | |
| But despite earlier rate cuts, mortgage rates have not fallen as banks have become more concerned about risky loans and falling house prices. | |
| The Chancellor said he was sympathetic to the plight of home owners. | The Chancellor said he was sympathetic to the plight of home owners. |
| "We need to do everything we possibly can to help people through what is undoubtedly a difficult period. | "We need to do everything we possibly can to help people through what is undoubtedly a difficult period. |
| "That means making sure we support the housing market but also making sure we support the wider economy, keeping people in work." | "That means making sure we support the housing market but also making sure we support the wider economy, keeping people in work." |
| Mr Darling announced that he was creating a new working group, chaired by former HBOS chief executive Sir James Crosby, to find ways to "re-open" the UK's ailing mortgage market. | Mr Darling announced that he was creating a new working group, chaired by former HBOS chief executive Sir James Crosby, to find ways to "re-open" the UK's ailing mortgage market. |
| And the Chancellor will be flying to Washington on Thursday to meet other finance ministers at the IMF's spring meeting and seek coordinated action to deal with the global financial crisis. | And the Chancellor will be flying to Washington on Thursday to meet other finance ministers at the IMF's spring meeting and seek coordinated action to deal with the global financial crisis. |