Defiant Osborne will not budge from policy of austerity

Chancellor George Osborne, not budging from his austerity plans. Photo: Press Association

You can't fault George Osborne for having the courage of his convictions.

Despite overseeing an economy which has contracted again - by a third of one per cent in the last few months of 2012 - he will not budge from the policy of austerity.

I have just interviewed the Chancellor and put the latest figures to him, the fact that Britain's economy was flat for the whole of last year and criticism he is drawing from all quarters, including the International Monetary Fund.

Mr Osborne blames the crisis he inherited and troubles abroad.

He is in a very difficult position. Austerity is designed to get Britain's debt problem under control which keeps borrowing costs low - but credit rating agencies seem to be losing faith as the economy stumbles on and government borrowing continues to rise.

The message from business here in Davos is that British companies must look to export markets for growth and they need more support from the government.

It doesn't need to cost a lot, they say. Will Mr Osborne listen?