Highlights - Osborne, OECD'S Gurria talk about UK economy

LONDON (Reuters) - Chancellor George Osborne spoke on Wednesday following the OECD's latest update on the health of Britain's economy.

Following are his key comments, along with some remarks from OECD secretary-general Angel Gurria.

OSBORNE ON MARCH 23 BUDGET

"The Budget will echo what I see as the central message of this OECD report. This government has set the right course for the British economy but we have so much more to do."

"We will stick to the course we have set out. The mission of this year's budget is to move from rescue to reform."

OSBORNE ON GROWTH

"Fiscal responsibility is a precondition for sustained growth but is not on its own enough."

OSBORNE ON UK JOBLESS DATA

"Today's labour market statistics confirm, as we forecast, a disappointing rise in unemployment on the ILO measure.

"But they also provide more positive evidence of rebalancing: 430,000 new private sector jobs have been created in the last year; more than 70,000 private sector jobs created over the last three months of 2010 alone, exceeding the 45,000 jobs lost in the public sector over the same period."

GURRIA ON FISCAL CONSOLIDATION

"These are challenging times for the UK. The fiscal consolidation programme can be fine-tuned. It's about some of the components.

"The main message is: "UK, stay the course.'

"There is a need for pretty much every country in the OECD to stop the rot, to stop the rise in debt-to-GDP ratios."

GURRIA ON BOE CHALLENGES

"We believe interest rates should be kept low. However further increases in inflation expectations -- and if this higher inflation were transmitted to wages -- would force the bank to raise rates earlier.

"However if you have a very tough fiscal policy, we believe that (monetary policy) can be an element of some flexibility to allow for growth to consolidate."

GURRIA ON BUDGET CUTS

"When you are dismantling some benefits that may no longer be justified, when you are cutting public expenses and maybe increasing some taxes, you are going to have an impact on growth. You shouldn't try to fight that or you will get into some very byzantine discussions.

"It's not a choice of personal taste. When you are double digits in terms of deficit you need to move very fast, very decisively.

"We all would like adjustment to be less painful. Some countries started the crisis in surplus, this country started the crisis with a heavy deficit. Now you have got to have a careful new balance between maintaining the recovery and having a soft landing to the deficit and the debt, otherwise you are never going to see the rewards.

"The rewards will come when you are able to sustain higher levels of growth without putting the economy in danger of losing the confidence of the markets."