Britain's recession-battered economy will return to growth this year, finance minister Alistair Darling insisted Sunday, days after a warning that the country's credit rating could be downgraded. Darling stood by his forecast of a return to growth by the end of 2009, which was criticised as over-optimistic when he made it in a budget statement in April.
"I believe we will return to growth by the end of the year," he told BBC television. "I said that in the budget and I haven't changed my judgement on that." He added that "there is a lot of uncertainty out there," but said measures taken by the government, "as well as the fact that other countries took action to support their economies last autumn, I think that will make a difference.
"That makes me confident but I'm also cautious and I think we've still got some way to go yet," he said, adding: "We've got a way to go through this year. I think it will turn at the turn of the year."
His comments came after Standard and Poor's warned Thursday that it may downgrade Britain's key credit ratings after placing the country's recession-battered economy on "negative" watch due to soaring public debt. International ratings agency S&P said it had downgraded its outlook on Britain's economy to "negative" from "stable" because of the country's "deteriorating public finances." On Friday official data showed that Britain's economy is contracting at its sharpest pace in almost three decades amid the worst global downturn since the 1930s. British gross domestic product (GDP) shrank 1.9 percent during the first quarter of 2009 compared with the final three months of last year, according to the Office for National Statistics (ONS).
Darling said unemployment will continue to rise this year, and the recovery will not immediately be felt across all parts of the economy. "There are a number of things that even after the recovery starts they will be coming through the system, and will need to be dealt with," he said.
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