Thatcher Presses U.S. on Deficit: Prime Minister Responds to Prodding for Lowered Interest Rates
LONDON, Oct. 29ÛÓFaced with intense political pressure today to cut British interest rates. Prime Minister Margaret Thatcher told Parliament that action on the U.S. budget deficit was "the most important single thingÛ needed to restore stability to international financial markets.</br></br>In an acrimonious exchange, opposition Labor Party leader Neil Kin-nock called for "significant cutsÛ in interest rates, beyond the "inconsequentialÛ half percentage point reduction that brought British base rates down to 9.5 percent last week.</br></br>But Thatcher fended off the questions and quickly focused on the "vitalÛ need for "early and decisive actionÛ in Washington.</br></br>"I welcome the talks President Reagan is having with Congress about cutting the U.S. budget deficit,Û Thatcher said. She called for measures that, "both in scale and content, go beyond what has previously been envisaged, yet would do more than anything else to bring back confidence.Û</br></br>American economists and politicians, including many who have long urged the administration to raise taxes and cut government spending, now are debating whether those measures might actually deepen the current crisis by throwing the economy into a recessionary deep freeze.