4 Oct 2011

UK credit measures announced

11:52 am on 4 October 2011

UK Chancellor George Osborne has announced steps to prevent a serious credit crunch.

The Treasury is to buy company debt to help small business borrow money in the longer term.

Called credit easing, it's designed to cut the cost of and increase supply of credit for companies.

Mr Osborne stressed that money is still tight and there will be no deviation from his deficit reduction plan.

He said solving the eurozone crisis remains the most important factor in kick starting growth in Britain.

But the BBC reports he told the annual conference of the Conservative Party in Manchester that it would be wrong to borrow money to fund temporary tax cuts or increase public spending.

''We are in a debt crisis, it is not like a normal recovery.'' he said. ''You can't borrow your way out of debt."

Mr Osborne said Britain's economic troubles were caused by the ''catastrophic mistakes'' of the previous Labour administration, as well as banks which ''let down their customers, let down their shareholders and let down this country''.