Recovery will take longer

BRITAIN’S recovery will take much longer than first hoped, the Chancellor George Osborne conceded yesterday after he faced MPs for the first time since the US’s credit rating was downgraded.

But Mr Osborne also claimed that the UK has now become a safe haven for investors because of the drastic measures the coalition has taken in tackling the deficit.

On a day when France also appeared to be on the verge of being dragged into the eurozone crisis following action to save Italy and Spain from being bailed out, Mr Osborne said that recent events had vindicated the government’s approach to the economy.

In a statement to the Commons – recalled to debate this week’s rioting – Mr Osborne warned that the world economy faced its most dangerous time since the credit crunch hit.

“The whole world now realises that the huge overhang of debt means that the recovery will take longer and be harder than had been hoped,” he told MPs. “Markets are waking up to this fact and that is what makes this the most dangerous time for the global economy since 2008.”

While the FTSE had slumped the market for government bonds was still buoyant thanks to tough deficit reduction measures, he said.

And he insisted that the Brit