Brown says higher public borrowing will help Britain beat recession

Oct 27, 2008, 13:50 GMT

London - The British government will increase public sector borrowing to speed up economic activity in order to tackle the looming recession, Prime Minister Gordon Brown said Monday.

Speaking to a group of academics and industrialists in London, Brown defended his controversial plans, saying that it was 'responsible' for government to boost spending and to maintain levels of investment in welfare policies.

The only way for Britain to benefit from the 'new global age' was to invest in the necessary long-term decisions, said Brown, without naming concrete figures.

It was now the wrong time to slash investment in areas like education, training, energy efficiency or tax cuts for hard-pressed families, said Brown.

'That means that the responsible course of government is to invest at this time to speed up the economic activity,' he said.

His remarks came after a group of senior economists warned that higher borrowing would damage private sector recovery, and advised instead that monetary and fiscal tools should be applied to stimulate the economy.

Britain's public sector borrowing hit a record 37 billion pounds (58 billion dollars) in the first half of this year, already exceeding the total of last year's borrowing.

Government forecasts predicted a total public sector borrowing requirement of 43 billion pounds between April 2008 and March 2009, a target expected to be revised in forthcoming budget updates.