Global economy warning lights are flashing, says PM
“Red warning lights” are once again flashing over the state of the global economy, the prime minister has said.
Speaking after the G20 meeting of world leaders, David Cameron said a “dangerous backdrop of instability” threatened Britain’s recovery, and “we should stick to our long-term plan”.
In a Guardian article, he warned of the impact from conflicts, low growth and a eurozone “on the brink” of recession.
Labour said Britain’s economic recovery was still not being felt at home.
But writing in the newspaper, Mr Cameron said “red warning lights are once again flashing on the dashboard of the global economy” – six years on from the crash that “brought the world to its knees”.
He said: “The eurozone is teetering on the brink of a possible third recession, with high unemployment, falling growth and the real risk of falling prices too.
“Emerging markets, which were the driver of growth in the early stages of the recovery, are now slowing down.”
BBC News political editor Nick Robinson
David Cameron calls it “pitch rolling” – preparing the ground for a big match.
The prime minister has just got his heaviest roller out to prepare for not one but two huge political matches – Thursday’s Rochester by-election and the Autumn Statement in less than three weeks time…
And he said the Ebola epidemic, conflict in the Middle East and Russia’s illegal actions in Ukraine were all adding to a “dangerous backdrop of instability and uncertainty”.
The warning comes after Mr Cameron pushed for a free trade deal between the European Union and the US at the G20 summit of world leaders in Australia.
The prime minister will make a statement to Parliament at 15:30 GMT about the summit and the state of the global economy.
Official figures released on Friday showed that Italy returned to recession after its economy contracted 0.1% in the third quarter – the 13th quarter in a row that it has failed to grow.
And the German economy narrowly avoided falling into recession with growth of 0.1% in the third quarter.
By contrast, the Bank of England has forecast that the UK economy will grow by 3.5% in 2014, remaining resilient in the face of the “subdued world demand”.
But in its latest update last week, it also warned that there were risks from the global economic situation and it revised down its forecasts for UK output next year.
Mr Cameron stressed that while the British economy was the fastest-growing in the G7, the reality of an interconnected world meant it would not be possible to “insulate ourselves completely”.
“We must do all we can to protect ourselves from a global downturn,” he added.
Looking ahead to the 2015 general election, he argued it was more important than ever for the UK to stick to the government’s austerity plan, which he said had seen the nation “prosper”.
His comments come three weeks before Chancellor George Osborne delivers his Autumn Statement – the last before May’s general election.
The BBC’s assistant political editor Norman Smith said the chancellor’s update on the state of the UK economy was likely to be an “austere” one with no pre-election giveaways.
‘Lots of excuses’
The deficit was rising, Norman Smith added, and the chancellor was going to find it difficult to bring it down again at the pace he wanted.
Figures published last week suggested that average earnings were now rising faster than prices for the first time in five years.
But Labour said most people did not feel an improvement in their living standards, citing comments made by former Prime Minister John Major, who told the BBC’s Andrew Marr Show on Sunday that people were “concerned and worried” that the economic recovery had not resulted in higher wages.
Shadow Work and Pensions Secretary Rachel Reeves said the government should be doing more to “secure the recovery”, including by increasing the minimum wage.
“Instead of making lots of excuses, David Cameron should be doing more to ensure working families start feeling the benefit of wage rises,” she told Sky News.