Prime Minister David Cameron has said the Government will refuse to back down on deficit reduction plans and pledged to boost credit for businesses and households, in a speech made yesterday on the UK's economy.
Acknowledging the on-going euro crisis, Cameron reiterated that 'tough' decisions and austerity measures to reduce the deficit must continue. He said: 'The tough decisions we have taken on deficit reduction really are beginning to yield real results. And there can be no deviation from this.'
Speaking to business leaders in Manchester, he also said that the benefit of current low interest rates should be passed on to businesses and families, and signalled that the Government was consulting with the Treasury about further ways to increase lending.
He said: "We can use the hard-won credibility of the Government's balance sheet to help the economy grow without adding even further to our debt."
"We have the credit easing programme for small businesses, we have mortgage help for people who want new homes, and then there are the guarantees for new infrastructure projects."
"I want us to go further, so I've asked the Treasury to examine what more we can do to boost credit for business, housing and infrastructure. We've taken the tough decisions to earn those low interest rates - so let's make sure we're putting them to good use."
The PM drew attention to the Government who, he said, had already decided to accelerate cuts to corporation tax to the lowest levels in the G7, created the National Loan Scheme to provide an additional £20 billion of capital for small businesses, and is continuing to reduce legislation regarding building planning rules.
Also nodding to the threat from uncertainty in Europe, director general of the Confederation of British Industry (CBI) John Cridland, said that tackling the deficit was beginning to win the confidence of international markets and kept interest rates low.
"We are beginning to make headway on our plans to rebalance our economy away from unaffordable, debt-driven consumption towards exports and business investment, but this will take time," he said.
"The Government does have a credible growth strategy but there are some short-term wins it urgently needs to deliver to help businesses grow and create new jobs. Now is the time to reduce regulation, give certainty on energy policies and kick-start new infrastructure projects."
Leader of the Labour Party Ed Miliband, remained critical, labelling Cameron as 'part of the problem'.
"All of Europe's leaders - including David Cameron - bear responsibility for the fact that over the last two years they haven't solved the problems of the Eurozone and they haven't had a proper plan for growth and jobs."