Austerity is working and UK has turned a corner says Chancellor

Chancellor George Osborne arrives to make a speech on the present state of the UK economy at a construction site of offices and 'affordable homes' in east London

The venue for today’s speech was chosen as a symbol of the turn-around in the economy, as it was a construction project where work came to an abrupt halt when investors withdrew funding in 2008, only to restart last year as vigour began to return to the economy.

Addressing an audience of academics, think-tanks and businesses, Mr Osborne said that “the last few months have decisively ended” the idea that the scale and pace of his measures were to blame for much slower than projected growth over recent years and dismissed suggestions that the Government’s support for the housing market meant Britain was experiencing “the wrong sort of growth”. Borrowing more to boost spending would have “undermined” recovery and the impact on living standards “would have been much harsher”, he said.

“Our economic plan is the right response to Britain’s macro-economic imbalances and the evidence shows that it is working,” said Mr Osborne.

“As I have argued...the correct macro-economic response to the perilous economic situation in which the UK found itself in 2010 is a combination of fiscal responsibility and monetary activism.”