On-Money

The Chancellor of the Exchequer, Alistair Darling today insisted that the UK economy was facing “unique pressures” from the credit crunch plus the rise in oil and food prices, as he attempted to clarify his appraisal that the global economic conditions were the worst for 60 years.

In a television interview to explain his comments made in a newspaper earlier this week about the grave state of the economy, the chancellor said the government had to help people. “We are facing a profound economic downturn along with every other country in the world,” Darling said.

“The difference is between us and previous governments is that we are taking action to help people – whether it is rescuing Northern Rock, or helping people to get back into work as they lose their jobs, or tax rebates which are due at the end of September.”

Darling insisted that the government would “help” people hit by the crisis, and played down rumours of tension with senior ministers.

“All my colleagues, the prime minister, every single one of us, are focused on one single thing – that is helping people, helping the economy go through what is a very difficult time. “

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Charles Bean, the Bank of England’s deputy governor warned that the downturn was as bad as in the 1970s and that everytime things looked up as if they were going to improve, a setback occurred. At Christmas 2007 he said that he had thought that things were past the worst but since then things had deteriorated.

He predicts that if the oil prices stabilised, along with credit markets then growth should pick up and inflation start to fall. And he suggested that the current UK standstill in growth was only temporary.

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