UK`s Darling Reassures on Economy-PM`s Spokesman

The British economy is in good shape and should be able to withstand the recent financial market ructions.

The British economy is in good shape and should be able to withstand the recent financial market ructions, finance minister Alistair Darling told his cabinet colleagues on Tuesday.

Prime Minister Gordon Brown's official spokesman told reporters that Darling had briefed the cabinet earlier in the day.

"His main point really was to emphasis the underlying strength of the British economy, particularly at this time of uncertainty in the financial markets," the spokesman said.

"We have seen volatility in financial markets and we have seen other external shocks in the past, but due to the framework of monetary and fiscal policy put in place in 1997 and the underlying strength of the economy we remain well placed to deal with these shocks."

The Bank of England said last week that it was too early to tell what effect the market disruption would have on businesses and consumers but many analysts have torn up their forecasts of interest rates rising again this year.

For now, however, the economy seems to be weathering the storm though there have already been signs that other economies are being affected -- U.S. jobs fell for the first time in four years in August.

The European Commission earlier on Tuesday raised its growth forecast for Britain this year to 2.9 percent from 2.8 percent previously. By contrast, the French GDP forecast was cut to 1.9 percent from 2.4 percent and the German economy was seen growing by 2.4 percent, instead of 2.5 percent.