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UK can handle eurozone crisis fallout - Cable
November 10, 2011 / 4:37 PM / 6 years ago

UK can handle eurozone crisis fallout - Cable

LONDON (Reuters) - Britain is ready to cope with any fallout from problems in the euro zone and is in a stronger position than before the 2008/9 financial crisis, Business Secretary Vince Cable said on Thursday.

“Our banks are better capitalised, they’ve been through the mill on one occasion, government has seen a crisis at first hand,” Cable told Reuters Insider on the margins of a conference in London.

Britain, which is outside the euro zone, also had experience “about how you deal very promptly with any drying up of liquidity in the system,” he said.

“I am pretty confident that the British government can handle any plausible outcome from this crisis,” he added.

Political and economic turmoil in Italy has spurred fears of a possible break-up of the euro zone with borrowing costs for Europe’s third biggest economy at unsustainable levels and the 17-nation currency bloc unable to afford a bailout.

Cable said the Bank of England, Britain’s Treasury and his own business department were all considering contingency measures, but did not give any details.

Britain is struggling to avoid a fresh recession as consumers cut back on spending, while the crisis in the euro zone - a major trading partner - has dampened hopes of an export-led recovery.

Its 18-month-old coalition government has pledged to stick to a tough deficit-reducing austerity programme that has pleased capital markets despite the economy barely growing over the last 12 months.

Cable said getting growth back into the economy was a “struggle,” but said Britain had a number of advantages that would help it ride out any euro zone market turmoil.

“Britain in many ways is in a stronger position than it was when the financial crisis hit three years ago,” he said.

”We have complete political stability in the UK, long term government, we are dealing with our financial problems, and the markets are giving us credit for that - Britain is a safe place.

Editing by Keith Weir

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