PM fails to rule out more austerity

David Cameron has conceded that he cannot envisage a time when the UK economy will not be under pressure as he failed to rule out austerity measures having to continue into the next decade.

Falling inflation was good news, he told The Daily Telegraph in an interview conducted before the publication of improving unemployment statistics. But he said the situation remained "a lot tougher than forecasters were expecting".

Cabinet Secretary Sir Jeremy Heywood warned last month that the fiscal reform challenge facing public services across the board could stretch as far as 2020.

In 2010 the Government set out a five-year austerity programme but Chancellor George Osborne has already been forced to extend that to 2017.

Asked if the austerity programme may continue right through the next five-year parliament, Mr Cameron told the newspaper: "This is a period for all countries, not just in Europe but I think you will see it in America too, where we have to deal with our deficits and we have to have sustainable debts. I can't see any time soon when the pressure will be off."

He continued: "I don't see a time when difficult spending choices are going to go away.

"We are in a very difficult situation. There is some good news, we've just seen inflation fall again.

"But I don't deny for a minute that it is a lot tougher than the forecasters were expecting."

He added: "We've had one of the longest and deepest recessions for decades in Britain. It was an incredibly tough set of circumstances and it has proved very hard to get out of those situations.

"But I think the plan we have has given people confidence that the Government has a grip and knows what needs to be done."