Economy Faces 'Dangerous Cocktail' Of Threats, Say George Osborne

Economy Faces 'Dangerous Cocktail' Of Threats, Say George Osborne
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George Osborne will warn of a "dangerous cocktail" of threats to the UK economy as he insists there can be no "let up" in the squeeze on spending.

The Chancellor will accuse political opponents of a "creeping complacency" about the prospects for recovery, citing turmoil in the Middle East, an economic slowdown in China, plunging commodity prices and a risk of stagnation.

In a barely-disguised swipe at Labour, he will say progress "could still easily be reversed" by politicians advocating "billions of pounds more debt-fuelled public spending".

Mr Osborne, making a speech in Cardiff, is expected to say: "Anyone who thinks it's mission accomplished with the British economy is making a grave mistake.

"Last year was the worst for global growth since the crash and this year opens with a dangerous cocktail of new threats. For Britain, the only antidote to that is confronting complacency and sticking to the course we've charted.

"I worry about a creeping complacency in the national debate about our economy. A sense that the hard work at home is complete and that we're immune from the risks abroad.

"A sense we can let up, and the good economic news will just keep rolling in.

"We are only seven days into the New Year, and already we've had worrying news about stock market falls around the world, the slowdown in China, deep problems in Brazil and in Russia.

"Commodity prices have fallen very significantly. Oil, which was over 120 dollars a barrel in 2012, now stands at less than 40 dollars.

"That is good for consumers and business customers here in Britain, bad news for the oil and gas industry, worrying for the creditors who have lent to it, and a massive problem for the countries that depend on it.

"Meanwhile the political developments in the Middle East, with Saudi Arabia and Iran, concern us all."

He will conclude: "Yes, the British economy has performed better than almost anyone dared to hope. And as an issue, the economy has slipped down the list of many people's everyday concerns.

"But the biggest risk is that people think that it's 'job done'.

"Many in our politics encourage this, irresponsibly suggesting that we can just go back to the bad old ways and spend beyond our means for evermore.

"Though the year is only seven days old, already we hear their predictable calls for billions of pounds more debt-fuelled public spending. They reject all the reforms we propose to deliver better-quality public services for less taxpayers' money.

"Today I want to issue this warning: unless we finish the job of fixing the public finances, to get Britain back into the black by finally spending less than we borrow, all of the progress we have made together could still easily be reversed."