17 Nov 2014

Cameron warns of looming ‘global economic disaster’

Prime Minister David Cameron gives a bleak assessment of the global economy and warns that the eurozone could be on the brink of recession.

Speaking following the G20 gathering of international leaders in Brisbane, 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”.

The prime minister said that the UK’s economic recovery was at risk against a “dangerous backdrop of instability and uncertainty”, referencing the conflict in the middle east and the Ebola outbreak in west Africa.

Labour said Britain’s economic recovery was still not being felt at home.

Writing in The Guardian newspaper, Cameron said: “As I met world leaders at the G20 in Brisbane, the problems were plain to see.

“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.

“Despite the progress in Bali, global trade talks have stalled while the epidemic of Ebola, conflict in the Middle East and Russia’s illegal actions in Ukraine are all adding a dangerous backdrop of instability and uncertainty.”

‘Fastest growing’

The British economy was the fastest growing in the G7, said Cameron. But he warned that the country was already seeing the effects of wider problems in the global economy, “with the impact of the eurozone slowdown on our manufacturing and our exports.”

Labour highlighted comments made by the former prime minister Sir John Major, who told the BBC’s Andrew Marr show on Sunday that “none of the growth in the economy has yet reached wage packets or salary slips”.

Shadow Treasury chief secretary Chris Leslie said: “David Cameron claims his policies are working, but as even Sir John Major admits, most people still aren’t feeling the recovery.

“Working people are £1,600 a year worse off under his Government, borrowing is going up so far this year and exports have fallen behind our competitors.

“David Cameron should be trying to strengthen growth and make sure working people finally benefit from it, not making excuses for slower growth.

Cameron’s warning comes days after the Bank of England governor, Mark Carney, warned that inflation could fall below one per cent in the next six months.