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George Osborne 'Not Worried' About High Interest Rates, Despite Warning Against Them 7 Times

Osborne 'Not Worried' About High Interest Rates, Despite Warning They'd Be A DISASTER
Asa Bennett
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George Osborne, Britain's Chancellor of the Exchequer, talks prior to the launch of the Economic Survey of the United Kingdom, by Angel Gurria, Secretary-General of the Organisation for Economic Co-operation and Development (OECD), at the Treasury in central London, Wednesday, Feb. 6, 2013. (AP Photo/Lefteris Pitarakis, Pool)
ASSOCIATED PRESS

After years hitching his economic credibility on low interest rates, George Osborne is executing an outright U-turn as he prepares to chalk them up as a "sign of success".

The chancellor's change of tune comes as the unemployment rate fell to 7.1%, on the brink of the Bank of England's 7.0% threshold at which policymakers will consider raising the base interest rate from its historic 0.5% low.

Osborne's aides told the Financial Times that higher interest rates would be welcomed by savers and a "sign of success". Even though it would be bad news for mortgage holders, Osborne's team insisted: "It’s not something we are worried about."

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Osborne's relaxedness about high interest rates is a stark contrast from the doom-laden pronouncements he used to make about them, warning high interest rates would be a "disaster" that would add £21 billion to debt interest repayments, while low interest rates were a "test of our success".

Here are just seven examples...

7 Times George Osborne Hailed Low Interest Rates
27 November 2011 (01 of07)
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Osborne told the Andrew Marr Show: “I am absolutely clear that government will do what it takes, will meet its fiscal mandate, meet its debt target, show the world that Britain, with its very high budget deficit can pay its way and keep those very low interest rates without which families watching this, businesses whose employees and employers watch this would be in real trouble."
29 November 2011(02 of07)
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Osborne told MPs: "Low interest rates are helping to keep people in their homes, mortgage payments down and businesses going. If hon. Members want to know what the alternative would be, they should look across the Channel to European countries in the middle of the debt storm, with interest rates going up. We can see that is a path that we must avoid."
6 December 2011 (03 of07)
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Osborne told MPs: "An increase in interest rates would be particularly damaging to an economy with the UK’s level of indebtedness. A one percentage point rise in interest rates would add around £21 billion to debt interest payments. That is why the Government are determined to keep Britain’s fiscal credibility and to keep our interest rates low."
7 May 2012 (04 of07)
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George Osborne told the Andrew Marr show: “We have very low interest rates and those are enjoyed by families in their mortgage bills and enjoyed by businesses with their business loans; and a big increase in interest rates, which you’ve seen in other countries, would come about if we abandoned our deficit plan, if we lost the confidence of the markets, if we were plunged back into that financial danger zone.”
26 June 2012(05 of07)
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Osborne told MPs: "It is this Government’s credible fiscal plan that has brought record low interest rates and market credibility. We can see across the English channel what would happen if we did not have that credibility.
11 September 2012(06 of07)
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Osborne told MPs: "Low interest rates are crucial to the recovery, and a loss of confidence in the UK’s ability to pay its way in the world will lead to an increase in market interest rates, an increase in mortgage costs for millions of families, and, of course, an increase in borrowing costs for businesses. It would be a disaster, and that is why the Government do not take the path advocated by the Labour party."
25 February 2013 (07 of07)
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George Osborne told MPs: "The deficit is down by a quarter, 1 million jobs have been created in the private sector, and interest rates remain very low. That is the test of the success of our policy."For good measure, Osborne later told MPs: "We are very clear that if we lost control of the country’s credibility in the international markets, as Labour would, interest rates would go up and families would pay more. The truth is that because of the credibility of our economic policy, interest rates are low and have stayed low today."
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