UK Warns of ‘Dangerous Cocktail’ of Economic Threats
LONDON – Britain’s Treasury chief is set to warn Thursday of a “dangerous cocktail” of new threats to the economy, insisting that the country’s robust growth is not immune to troubles from abroad.
George Osborne will use a speech to underscore his fears about what he described as “creeping complacency” in the debate about the national economy, which has been one of the best-performing in the developed world in recent years.
In remarks released in advance of the speech, he cites the slowdown in China as well as a drop in global stock markets and commodity prices among the key concerns. Britain had about 10 billion pounds ($14.6 billion) in capital investment in the offshore oil and gas industry in 2015, making it vulnerable to a world of lower oil prices.
“Last year was the worst for global growth since the crash and this year opens with a dangerous cocktail of new threats,” Osborne said. “For Britain, the only antidote to that is confronting complacency and sticking to the course we’ve charted.”
Britain’s economy has expanded for 11 quarters in a row. It grew by 0.4 percent in the third quarter compared with the previous three-month period.
But in his remarks, Osborne expressed concern that the economy might fall down on the list of everyday concerns in Britain.
“Anyone who thinks it’s mission accomplished with the British economy is making a grave mistake,” he is to say.
As if to underscore the potential for trouble, the pound hit a 5 ½ year low to the dollar, trading at $1.455.
“The pound has weakened as expectations of a Bank of England interest rate hike any time soon have waned and there has also been a mounting market focus on the U.K.’s referendum on EU membership,” said Howard Archer, the chief U.K. and European economist for IHS Global Insight.