David Cameron targets public sector deficit

Britain's public sector deficit is "a dark black cloud" holding back the economy, Tory leader David Cameron warned today.

He said the massive borrowing had to be tackled to avert the risk of the country "tipping back into recession" and was threatening investment, confidence and growth.

Mr Cameron was speaking to a City audience flanked by shadow chancellor George Osborne and shadow business secretary Kenneth Clarke.

The Conservative leader said: "The deficit is the biggest threat to our economy. Our deficit is holding back confidence, is holding back investment, holding back growth.

"It is a dark black cloud holding back our economy and we have got to deal with it. There's a real choice at this election about how we deal with this deficit."

Mr Cameron said his party had been "absolutely clear" a start had to be made on tackling the problem in 2010, with the "bulk of the structural deficit" paid off within a parliament.

He went on: "We have been prepared to make difficult decisions, not just to talk about the easy things, to cut what people actually don't like, but also some difficult decisions on pensions, on public sector pay, on benefits, on public sector administration."

And he said if failure to tackle the deficit led to a loss of confidence in the UK economy, that would mean higher interest and mortgage rates, and the risk of "tipping back into recession".

Mr Osborne and Mr Clarke were also due to address the gathering, organised by Thomson Reuters.