Out of recession and into debt

The deficit is in the Tories’ crosshairs this morning. George Osborne pens an article in the Times, castigating Brown’s obsession with continuity:

‘We need a new British economic model that learns from the mistakes of the past. First, that new economic model requires government to live within its means. We entered the recession, after years of growth, with one of the highest deficits in the developed world and we leave the recession with our credit rating under threat. That will have potentially disastrous consequences for international confidence. If Britain starts to pay the sort of risk premiums that Greece is paying, the interest bill on a £150,000 mortgage would go up by more than £200 a month.

The overriding objective of fiscal policy must be to provide the credible deficit reduction plan that allows the Bank of England to keep mortgage rates as low as possible for as long as possible.