LONDON — Prime Minister David Cameron predicts a difficult year for the British economy that will require maintaining the current mix of low interest rates and budget-deficit reduction.
LONDON — Prime Minister David Cameron predicts a difficult year for the British economy that will require maintaining the current mix of low interest rates and budget-deficit reduction.
“It’s a tough economic environment we’re in,” Cameron said Sunday on the “Andrew Marr Show” on the BBC. “Right now, Britain needs low interest rates.”
Cameron indicated in a Sunday Telegraph interview that he would like to stay in office another seven years, even as an opinion poll suggested his Conservative Party will lose power in 2015. To keep borrowing costs down, the coalition government must sustain a “credible strategy” for controlling the budget deficit, he said Sunday.
Persuading global investors that they should keep buying British bonds is ultimately more important than whether “hugely important” ratings companies downgrade gilts, he said. Standard & Poor’s last month lowered its outlook on Britain’s top credit rating to negative, citing weak economic growth and a worsening debt profile.
Bank of England policymakers next week will keep the benchmark interest rate at 0.5 percent and the quantitative-easing target at £375 billion ($603 billion), according to economists surveyed by Bloomberg News.
The prime minister also delivers a speech this month on his vision for Britain’s role in Europe as he comes under pressure from lawmakers in his party who want to pull out of the European Union. He told the BBC that advisers were studying areas in which Britain may seek to revise its EU agreements.