The U.K.'s most recent GDP showing was disappointing, but the government can make policy adjustments to improve future performance, Britain's Chancellor of the Exchequer George Osborne told CNBC Friday.
"We need to make sure we're removing all the obstacles to business growth and investment," Osborne said in an interview with Maria Bartiromo at Davos. He said that could be accomplished by "dealing with some of the regulation and competition issues that hold back British business."
The 0.5-percent GDP contraction stunned economists and officials alike, raising questions about a double-dip for Britain's economy, but Osborne said bad weather was clearly a drag on growth.
"It was the worst December we had for a 100 years," Osborne said.
Osborne, however, admitted there was little the government could do to stoke the economy.
"Our budget deficit precludes fiscal stimulus," he said, adding that spending discipline "gives greater freedom to the (central) bank to keep interest rates lower for a longer period."