David Cameron: Second world economic crash looming

Prime Minister David Cameron said that a lack of growth in Europe and conflicts in the Middle East and Ukraine added to the backdrop of instability. Picture: AP
Prime Minister David Cameron said that a lack of growth in Europe and conflicts in the Middle East and Ukraine added to the backdrop of instability. Picture: AP
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DAVID Cameron has warned that the “red warning lights are flashing”, signalling a new global economic disaster.

The Prime Minister used the warning to appeal to voters to back his party in the general election in six months, claiming only austerity will provide the stability the country needs.

But in clashes in the Commons, Labour leader Ed Miliband accused Mr Cameron of “getting his excuses in early” and said it was his government’s mishandling of the economy that has left the UK badly exposed.

In a bleak assessment of the international economic picture, Mr Cameron used an article in a national newspaper to claim there is a “dangerous backdrop of instability and uncertainty” along with diplomatic, humanitarian and economic problems around the world.

The Prime Minister gave his warning six years after the financial crash “brought the world to its knees”, as he concluded the G20 summit in Australia where the political leaders of the world’s biggest economies discussed how to get the international economy moving.

He highlighted a growing crisis in the eurozone again, where countries are facing a new financial meltdown and the economy is slowing, and which he said is “on the brink of recession”.

Among the EU’s trouble spots is Italy, the fourth-largest European economy, which returned to recession last week, while Germany narrowly avoided the same fate.

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Outside the EU, growth has slowed down in China, the world’s second-largest economy, while Japan, the world’s third largest economy, went back into recession yesterday.

By contrast, the Bank of England has forecast that the UK economy will grow by 3.5 per cent in 2014, remaining resilient in the face of the “subdued world demand”.

With a general election looming, Mr Cameron pleaded with voters to back his economic plan to provide greater stability at a “dangerous time”.

But Labour highlighted comments by former Tory prime minister Sir John Major. He said people were “concerned and worried” that “none of the growth in the economy has yet reached wage packets or salary slips”, to warn that Mr Cameron’s plan is not working.

Mr Cameron said: “As I met world leaders at the G20, 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.

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“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.”

He added: “The reality is, in our interconnected world, wider problems in the global economy pose a real risk to our recovery at home. We cannot insulate ourselves completely, but we must do all we can to protect ourselves from a global downturn.”

The Prime Minister’s assessment saw Mr Miliband go on the attack in response to Mr Cameron’s statement in the Commons on the G20.

Mr Miliband told Mr Cameron: “You tell us there are red lights flashing in the global economy. I think that is what is known as getting your excuses in early.

“You used to tell us that the problems in the British economy were all to do with the British government and nothing to do with international factors.

“Now, you want to tell us that on your watch they’re all to do with international factors and nothing to do with the British government.”

G20 welcome for no vote

DAVID Cameron has said that international leaders have “unanimously” welcomed Scotland’s vote to stay part of the UK and that it was a “theme of unity” at a tense G20 conference last week.

But the Prime Minister also congratulated new SNP leader Nicola Sturgeon on her anticipated appointment as First Minister this week.

His words came as he was challenged during his statement on the G20 by SNP Westminster leader Angus Robertson over his refusal to attend an international conference on nuclear weapons in Vienna.

Mr Robertson pointed out that “a majority of G20 leaders” including the US had now committed to going to the conference.

In response Mr Cameron said: “First, I am very happy to congratulate Nicola Sturgeon on her election and appointment.” However, he added: “One thing I noticed about the G20 was that almost every country made a point of saying how pleased it was that the UK had stayed together.”

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