David Cameron frustrated by slow recovery pace

Prime Minister David Cameron today admitted that he was frustrated by the slow pace of recovery in Britain.

But he said he is planning moves to take advantage of Britain's record low interest rates for state borrowing to put Government support behind mortgages, house-building and infrastructure projects.

Speaking during a visit to Mexico, Mr Cameron said he wanted to boost exports to the emerging economic giants, but would resist calls to go on a "borrowing and spending spree".

In a round of broadcast interviews in Mexico City, Mr Cameron said: "I know that people find it immensely frustrating - as I do - that it is such a struggle to recover from what was an appalling financial boom and bust that we suffered, but we have seen some good news this week. We have seen inflation falling - that's good - and we have seen unemployment falling for a third month in succession.

"We need to have a rebalancing in our economy, where we export more and make more and the private sector grows and we sell to countries like this, one of the fastest growing new countries in the world.

"That is taking place, but I accept that it is frustrating, it is too slow and people want it to go faster and so do I."

Mr Cameron added: "What we can't do is go on some spending and borrowing spree. You can't borrow your way out of debt.

"But what we can do is use the fact that because of the credibility we have got and the record low interest rates, we can make sure we pass those low interest rates on to businesses and homeowners, make sure we go ahead with infrastructure that will help our economy and get houses built in Britain again."

Mr Cameron held out little hope that this autumn's 3p rise in fuel duty will be cancelled, saying that "we always look at these things" but adding: "I think people sitting at home know that the Government doesn't have a bottomless pit of money."

Mr Cameron has met Mexican business leaders - including the world's richest man Carlos Slim, the telecoms mogul - during his visit to Mexico City, in the hope of drumming up new export markets for British goods.

He said he wanted to provide an "active, sleeves-rolled-up government that says 'let's go out to the fastest growing countries in the world and trade with them and let's do everything we can to get the economy moving"'.

Asked if he agreed with Business Secretary Vince Cable that the world economy was in a 1930s-style slump, Mr Cameron said: "I wouldn't put it like that."

He indicated that he does not believe that possible changes to the eurozone to stabilise the single currency, such as banking union and fiscal union, will require a referendum in the UK.

A referendum is required only when new powers are transferred from Westminster to Brussels, he said.

He said he was "relaxed" about the proposed changes, but would always ensure that safeguards were in place to protect Britain's interests in the single market.

Speaking after a G20 summit in Mexico which saw plans taking shape for a bailout of Spain and Italy, Mr Cameron said: "I am confident that they know how serious the situation is and they know that if they don't use all the instruments, all the institutions of the eurozone to stand behind their currency, they will face problems.

"It is sometimes frustrating that they get so close to the brink before they take the steps that are necessary."

Some of Mr Cameron's comments at Los Cabos appear to have ruffled the feathers of French President Francois Hollande and German Chancellor Angela Merkel, but he insisted he remains on good terms with them.

"I think that you should speak clearly and frankly on behalf of your country but you should also co-operate and work with your partners, and that is what I try to do," he said.

PA