By Marcus Leach

As global stock markets take a battering Chancellor George Osbourne has vowed to press on with austerity cuts in a bid to reduce the country's budget deficit.

Mr Osbourne, addressing the recalled House of Commons, stressed that his approach was correct, especially given the current economic crisis that has hit the US and the eurozone.

“We have in place well-developed and well-rehearsed contingency plans. We must also continue to implement the fiscal consolidation plan that has brought stability to our bond markets," the Chancellor said.

“I believe that events around the world completely vindicate the decisions of this coalition government from the day it took office to get ahead of the curve and deal with this country’s record deficit.

“These bold steps have made Britain that safe haven in the sovereign debt storm.”

In answer to those critics who claimed not enough was being done by the government to promote growth Mr Osbourne promised to "take on the forces of stagnation."

However, Mr Osbourne did say that he was aware the UK was not immune to the global economic crisis, and that the country still may suffer the effects of the global economic crisis.

“Sadly Britain is not immune to these market movements,” he said.

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