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Cheap borrowing key, says Cameron

January 6th, 2013 Bussines

Prime Minister David Cameron has said reducing the UK’s debt burden to ensure it can borrow money cheaply from international investors remains the government’s top priority.

For this reason, he told BBC One’s Andrew Marr Show, the UK’s triple-A rating was “hugely important”.

Mr Cameron said the coalition also needed to address youth unemployment, which was “much too high”.

The economy needed rebalancing, with a larger private sector, he added.

The prime minister said it was vitally important the government maintained its “credibility for deficit reduction” so it could continue to borrow money at low rates of interest.

The coalition has introduced a series of austerity measures designed specifically to reduce the country’s debt levels.

Despite these efforts, last month Standard & Poor’s became the last of the three main international credit rating agencies – which include Moody’s and Fitch – to put the UK on a “negative outlook”. It raised concerns about levels of government borrowing and weak growth in the UK economy.

The UK currently holds a AAA rating from all three agencies – the only country apart from Germany and Canada to do so.

There are concerns that if the UK loses its top rating, international lenders would view the country’s economy as more risky and charge the government more to borrow money.