George Osborne says Britain is "turning corner" Britain's economy "is turning a corner," George Osborne claimed on Monday in a speech designed to heap pressure on his political opponents in the run-up to the party conference season. Speaking at the One Commercial Street development on the fringe of the City of London, the chancellor used the half-finished development of offices and homes as a parallel with the government's efforts since 2010 to repair the economy. The economic collapse was even worse than we thought. Repairing it will take even longer than we hoped. But we held our nerve when many told us to abandon our plan," the chancellor said. The speech was designed to claim victory in the three-year debate over fiscal policy, against those with weaker plans for deficit reductions. "Those in favour of a Plan B have lost the argument," he said, pointing out that economic indicators had improved even though the government had not changed course on its fiscal plans, something his critics had said was highly unlikely. Mr Osborne's remarks followed a week in which independent institutions have backed the idea that the UK may be reaching "escape velocity" from the longest downturn on record. The National Institute of Economic and Social Research, a leading research body, estimated that the UK expanded by 0.9 per cent in the three months to the end of August. The Organisation for Economic Co-operation and Development also upgraded its forecasts , saying it expects the UK to grow by about an annualised 3.5 per cent in the second half of this year. Economic output is still below its pre-recession peak, however. The last official figures released by the Office for National Statistics, for the second quarter of 2013, showed that the British economy was still 3.2 per cent smaller than in the first three months of 2008. The speech forms part of a clear attempt by Mr Osborne to defend his economic record, and discredit Labour criticisms, before the party conference season. Just last week Ed Balls, the shadow chancellor, suggested that despite the OECD doubling its UK growth forecast, the government's economic plans had done "long-term damage" to the country. Those in favour of a Plan B have lost the argument George Osborne, UK chancellor Mr Osborne will also repudiate the view that the recent growth spurt in the UK shares many of the traits that made the pre-recession boom unsustainable. Critics have argued that the economy is still dominated by services and that there is little sign of a rebalancing away from domestic consumption towards exports. Last week, business surveys suggested that the three large sectors of the economy - construction, manufacturing and services - were growing at a rapid pace. However, by pointing out that risks still remain, the chancellor is also attempting to strike a balance between cautious optimism and hubris. Despite the run of good data, Mr Osborne emphasises that the recovery is in its "early stages." The Treasury considered and rejected casting the speech in the past tense that Britain's economy had turned the corner, and Mr Osborne rejected requests in questions to say that he had seen "green shoots" in the economy. The chancellor also warned that the improved economic conditions should not be used as an excuse to relax the deficit reduction plan, as this would send the wrong signal to investors. "More tough choices will be required . . . to find many billions of further savings," he said.