Data Shouldn't Derail UK Plan for Cuts: Deputy PM
Recent figures showing a surprise contraction in the UK economy were disappointing, but it shouldn't stop plans to lower the deficit, UK Deputy Prime Minister Nick Clegg told CNBC.
"Cutting the deficit isn't a luxury," Clegg said at the World Economic Forum in Davos, Switzerland.
The latest numbers showed the economy shrank by 0.5 percent in the fourth quarter, prompting speculation the country could be facing a double-dip recession.
Not implementing the coalition government's spending cuts to lower the deficit would endanger the "credibility of UK PLC" and the plan "shouldn't be blown off course by the disappointing figures of one quarter," he said.
Clegg said the figures were more of a mixed picture than they appeared because of the weather and pointed to advancement in manufacturing as a positive.
Recent gains in inflation are "unwelcome," but is again, part, of a mixed economic picture, he said.
Looking to financial services, the government must make sure a situation where banking losses are "shuffled off to the taxpayer" does note happen again, but a strong financial services sector is essential for a thriving economy.