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| Global economy warning lights are flashing, says PM | Global economy warning lights are flashing, says PM |
| (35 minutes later) | |
| "Red warning lights" are once again flashing over the state of the global economy, the prime minister has said. | "Red warning lights" are once again flashing over the state of the global economy, the prime minister has said. |
| David Cameron said weak growth in Europe, a slowdown in Asia and conflicts around the world had created a "dangerous backdrop of instability". | David Cameron said weak growth in Europe, a slowdown in Asia and conflicts around the world had created a "dangerous backdrop of instability". |
| Chancellor George Osborne said the UK was outperforming many other economies but it was vital the government was not "diverted" from its long-term goals. | Chancellor George Osborne said the UK was outperforming many other economies but it was vital the government was not "diverted" from its long-term goals. |
| Labour said Britain's economic recovery was still not being felt at home. | Labour said Britain's economic recovery was still not being felt at home. |
| Mr Cameron is making a statement to Parliament on the state of global economy and the outcome of the G20 summit of world leaders in Australia. | |
| In an article in the Guardian, 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". | In an article in the Guardian, 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. | 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." | "Emerging markets, which were the driver of growth in the early stages of the recovery, are now slowing down." |
| Analysis | Analysis |
| BBC News political editor Nick Robinson | BBC News political editor Nick Robinson |
| David Cameron calls it "pitch rolling" - preparing the ground for a big match. | 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... | 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... |
| Read more from Nick | Read more from Nick |
| 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". | 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". |
| Data released on Monday showed Japan is in recession after its economy contracted in two consecutive quarters. | Data released on Monday showed Japan is in recession after its economy contracted in two consecutive quarters. |
| Italy returned to recession last week after its economy shrunk 0.1% in the third quarter while Germany narrowly avoided the same fate with growth of just 0.1% between July and September. | Italy returned to recession last week after its economy shrunk 0.1% in the third quarter while Germany narrowly avoided the same fate with growth of just 0.1% between July and September. |
| 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". | 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. | 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. |
| 'Global downturn' | 'Global downturn' |
| 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". | 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". |
| Analysis | Analysis |
| BBC News economics editor Robert Peston | BBC News economics editor Robert Peston |
| David Cameron, perhaps learning a lesson from his stockbroker father, got his timing right. | David Cameron, perhaps learning a lesson from his stockbroker father, got his timing right. |
| On the morning that he warns that red lights are flashing on the dashboard of the global economy, Japan announces that it has unexpectedly crashed into recession. | On the morning that he warns that red lights are flashing on the dashboard of the global economy, Japan announces that it has unexpectedly crashed into recession. |
| Japan is still the world's third biggest economy. And its economic contraction, which caught markets by surprise, coincides with the prolonged flat-lining of the eurozone and what looks like a long-term deceleration of growth in China. | Japan is still the world's third biggest economy. And its economic contraction, which caught markets by surprise, coincides with the prolonged flat-lining of the eurozone and what looks like a long-term deceleration of growth in China. |
| Is the global economy headed for the rocks? | Is the global economy headed for the rocks? |
| Speaking on a visit to a factory in Kent, Mr Osborne said the PM's comments were a reminder that the UK faced "plenty of risks" despite recent positive economic indicators. | Speaking on a visit to a factory in Kent, Mr Osborne said the PM's comments were a reminder that the UK faced "plenty of risks" despite recent positive economic indicators. |
| "The British economy is performing strongly, but we're not immune to developments in the world," he said. | "The British economy is performing strongly, but we're not immune to developments in the world," he said. |
| "Japan has gone into recession, we know Europe is weak, so it is all the more reason we have to go working through our long-term economic plan, all the more reason we have to resist those who say we can borrow and spend more - that would take Britain back to square one." | "Japan has gone into recession, we know Europe is weak, so it is all the more reason we have to go working through our long-term economic plan, all the more reason we have to resist those who say we can borrow and spend more - that would take Britain back to square one." |
| Mr Cameron's comments come three weeks before Chancellor George Osborne delivers his Autumn Statement - the last before May's general election. | Mr Cameron's 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. | 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. |
| 'Hubris' | 'Hubris' |
| 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. | 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. |
| Ministers welcomed figures published last week showing average earnings are now rising faster than prices for the first time in five years, saying their economic strategy was starting to bear fruit. | Ministers welcomed figures published last week showing average earnings are now rising faster than prices for the first time in five years, saying their economic strategy was starting to bear fruit. |
| Labour said that while the UK could not be immune from economic uncertainty in its major trading markets, David Cameron was not doing enough to "secure the recovery". | Labour said that while the UK could not be immune from economic uncertainty in its major trading markets, David Cameron was not doing enough to "secure the recovery". |
| "Despite some of the hubristic language in the last few weeks, actually in the last four and half years life has got harder not easier for many working people," shadow work and pensions secretary Rachel Reeves told the BBC News Channel. | "Despite some of the hubristic language in the last few weeks, actually in the last four and half years life has got harder not easier for many working people," shadow work and pensions secretary Rachel Reeves told the BBC News Channel. |
| "All is not fine in the garden here. Despite the fact the economy is now growing, for many people this does not feel like any type of recovery at all." | "All is not fine in the garden here. Despite the fact the economy is now growing, for many people this does not feel like any type of recovery at all." |
| A future Labour government, she added, would increase the value of the minimum wage while tackling the deficit in a "fairer" manner than the coalition. | A future Labour government, she added, would increase the value of the minimum wage while tackling the deficit in a "fairer" manner than the coalition. |
| David Blanchflower, a former member of the Bank of England's Monetary Policy Committee, told BBC Radio 4's The World at One austerity had "failed". | David Blanchflower, a former member of the Bank of England's Monetary Policy Committee, told BBC Radio 4's The World at One austerity had "failed". |
| "Economies naturally recover as long as you leave them alone," he said. | "Economies naturally recover as long as you leave them alone," he said. |
| "I would argue that these are problems that the government should have prepared for." | "I would argue that these are problems that the government should have prepared for." |
| But Conservative MP and Treasury Committee member Jesse Norman said this was a "self contradictory" argument. | But Conservative MP and Treasury Committee member Jesse Norman said this was a "self contradictory" argument. |
| He said: "What was desperately required was for the incoming government to take control of the economic situation and that is what George Osborne has done." | He said: "What was desperately required was for the incoming government to take control of the economic situation and that is what George Osborne has done." |