I'll lead independence fight against Alex Salmond, says Alistair Darling

Former chancellor Mr Darling, the Labour MP for Edinburgh South West, is seen by many as the most credible man for the job and he has now confirmed he is ready to take it on.

His commitments at Westminster mean he cannot manage the whole anti-independence campaign, but he is willing to devote all his time to it in the months immediately before the referendum.

'I am ready to do everything I can. It is something I believe in. I am passionate about this,' Mr Darling told the Sunday Mail.

Alistair Darling believes 

Alex Salmond's judgement is flawed (PA)

He plans to make a positive case for Scotland remaining part of the union, rather than rubbish Mr Salmond's claim that it could become a strong independent nation.

However, Mr Darling is prepared to point out what he views as the first minister's weaknesses, even though he described him as 'an accomplished politician'. 

'That doesn't mean you have to be mesmerised by him,' said the ex-chancellor.

'One of the things is that he is happiest when he is abusing David Cameron. He is distinctly unhappy when you press him on specifics and practicalities.

'I think his judgment is wrong. This is the man who famously said he thought the Royal Bank of Scotland's bid for ABN Amro was a good thing.'

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Chancellor 'confident' on economy

Chancellor George Osborne has insisted the Government was doing everything possible to "weather the storm" as economic forecasters warned the UK is likely to be already in recession.

The Ernst & Young ITEM Club and the Centre for Economics and Business Research both believe that gross domestic product (GDP) shrank in the final quarter of last year and will fall again in the first three months of 2012. A recession is defined as two consecutive quarters of contracting output.

Mr Osborne said the most recent predictions by the Office for Budget Responsibility, which issues official forecasts, showed that Britain would have a negative quarter of growth but not go into recession.

He told BBC Radio 4's Today programme: "That's their forecast, but they were the first to say that it is very uncertain and one of the biggest risks to the British economy is the further deterioration of the eurozone crisis.

The Government is doing everything it can to deal with the economic crisis, Chancellor George Osborne has said

"I said openly at the end of November to the House of Commons when I made my autumn statement that if the eurozone were to go into a deep recession, that would have a real impact on the British economy.

"I'm confident the British Government is doing everything it can with a very difficult inheritance, facing a very difficult international situation to get Britain through this, to weather the storm."

The warnings come shortly after France, the second biggest economy in the eurozone, saw its AAA credit rating downgraded by Standard & Poor's in a move which signals more troubles for the single currency bloc.

Professor Peter Spencer, chief economic adviser to the Ernst & Young ITEM Club, said: "Figures for the last quarter of 2011 and the first quarter of this year are likely to show that we are back in recession and we are going to have to wait until this summer before there are any signs of improvement. But it's not going to be a repeat of 2009 - we are not going to see a serious double dip."

The ITEM Club report forecasts GDP growth of just 0.2% this year before increasing to 1.8% in 2013 and 2.8% in 2014. It said deteriorating levels of confidence will see business investment stagnate in 2012, while export prospects have already slowed.

But the group said UK companies have stronger balance sheets than in 2009 and have built up large cash stockpiles, which will provide a useful insurance policy if the situation deteriorates further.

©Press Association

Osborne sees reason for economic optimism

LONDON (Reuters) - Britain can be confident about its economic outlook this year, with inflation falling, interest rates low and plans in place to deal with a record budget deficit, Chancellor George Osborne on Thursday.

The sovereign debt crisis in the neighbouring euro zone remained a serious threat to the economy, but Osborne said in an interview with ITV News he thought the single currency would survive.

Osborne's cautious optimism came as the National Institute of Economic and Social Research, a leading think tank, said growth had slowed to just 0.1 percent in the last three months of 2011.

The Bank of England on Thursday kept interest rates at a record low of 0.5 percent, where they have been for nearly three years.

Britain is teetering on the edge of recession as global growth slows, government spending cuts bite, and all-important consumers struggle with high inflation, tax hikes and slow wage rises.

Osborne said there were "signs" the economy was turning a corner and there were reasons to be optimistic in a year when Britain will host the Olympic Games in London.

The low interest rates on British sovereign debt, a result of international markets' approval of the government's deficit-cutting programme, were a "huge boost" to the economy, he said.

"Borrowing is coming down. The job is being done as we talk. Jobs are being created in the private sector," Osborne said.

"We've been taking the right decisions. ... they've laid the foundations for growth, job growth, confidence in Britain in this important year where we host the Olympics. There are reasons to be optimistic," he added.

Consumer price inflation fell to 4.8 percent in November, and the Bank of England has forecast that weak economic growth will push inflation below its 2 percent target by the end of 2012.

The Chancellor is optimistic.

"One thing you will see this year is a fall in prices, in the rate of inflation," Osborne said.

He called the current period "challenging" but said that with the hoped-for decline in inflation, "there are some things going right as well, overall you can look to the future with a lot of confidence."

Osborne said he thought the euro would survive the sovereign debt crisis in the neighbouring euro zone, a major export market for the UK, but reiterated the effect on Britain.

"There is a lot of commitment to making the euro work. But there is no doubt that Europe needs to do more to help its economies grow and take some of the decisions that actually we've taken here in Britain to deal with our debts," he said.

"Ultimately, this year of course, what happens in the euro zone is important ... if the European continent is facing problems - that has an impact here in Britain," he added.

Osborne said he wanted to see bonuses fall at the nationalised Royal Bank of Scotland, which announced 4,450 job losses on Thursday in a cutback of its investment banking operations.

"I'm going to use my power as the shareholder to do what's necessary, to make sure that bonuses at RBS's investment bank are much lower than they were last year," he said.

High pay for bankers has become a hot political issue after the 2007-8 financial crisis that saw Britain bail out and nationalise leading banks and suffer a steep recession.

Britain owns 83 percent of RBS, Britain's fifth biggest bank after pumping in 46 billion pounds to keep it from going under.


©Reuters 2012