DEPUTY Prime Minister Nick Clegg claimed the UK economy was "turning a page" last night, just hours after his Business Secretary warned the country was littered with "zombie companies".
Vince Cable predicted that many UK firms would be unable to survive if interest rates rose.
The senior Liberal Democrat, the subject of much speculation over leadership hopes, also warned of a point when "we are going to have to face reality."
To prepare for that reckoning, he said he wanted to improve the system of company insolvencies.
Just hours later, in a speech to business leaders, LibDem leader Mr Clegg struck a cautiously optimistic note about the state of the UK economy.
"Slowly, Britain's economy is healing," he said. "Confidence is seeping back into business."
He added: "As part of a global economy, we are never isolated from the economic realities of the rest of the world.
"But finally, I believe, we're turning a page on the mess we inherited."
But, he added, "we've still got a way to go". He also said that "urgent reform" was needed to boost the skills, training and employment support for young people and announced a review due to report in the autumn.
Mr Clegg also warned eurosceptics of the dangers of the UK ending up in a "halfway house", damaging the economy by loosening ties with Brussels.
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