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British Prime Minister David Cameron says ‘red warning lights’ flashing on global economy British Prime Minister Cameron says ‘red warning lights’ flashing on global economy
(about 5 hours later)
LONDON — In a starkly downbeat assessment, British Prime Minister David Cameron has written that the world’s economy could be headed for another fall.LONDON — In a starkly downbeat assessment, British Prime Minister David Cameron has written that the world’s economy could be headed for another fall.
“Six years on from the financial crash that brought the world to its knees, red warning lights are once again flashing on the dashboard of the global economy,” Cameron writes in a piece published in Monday’s edition of Britain’s Guardian newspaper. “Six years on from the financial crash that brought the world to its knees, red warning lights are once again flashing on the dashboard of the global economy,” Cameron writes in a piece published in Monday’s edition of Britain’s Guardian newspaper.
The prime minister cites a eurozone economy that is “teetering on the brink of a possible third recession, with high unemployment, falling growth and the real risk of falling prices too.” He also references emerging market economies that “were the driver of growth in the early stages of the recovery,” but are now slowing, as well as stalled trade talks, instability in the Middle East, war in Ukraine and the spread of Ebola. The prime minister cites a euro-zone economy that is “teetering on the brink of a possible third recession, with high unemployment, falling growth and the real risk of falling prices too.” He also references emerging market economies that “were the driver of growth in the early stages of the recovery” but are now slowing, as well as stalled trade talks, instability in the Middle East, war in Ukraine and the spread of Ebola.
The bleak prognosis comes at the end of the G-20 summit in Brisbane, Australia, where leaders of the world’s biggest economies struggled with strategies for kick-starting growth. The bleak prognosis comes at the end of the Group of 20 summit in Brisbane, Australia, where leaders of the world’s biggest economies struggled with strategies for kick-starting growth.
Others have issued similarly negative pronouncements in recent days, particularly with relation to Europe. Bank of England Governor Mark Carney told reporters in London last week that “a specter is now haunting Europe –– the specter of economic stagnation.” Others have issued similarly negative pronouncements in recent days, particularly with relation to Europe. Mark Carney, the governor of the Bank of England, told reporters in London last week that “a specter is now haunting Europe — the specter of economic stagnation.”
But Europe is hardly the only sick patient. Japanese government figures released Monday showed the world’s third-largest economy had unexpectedly fallen back into recession , with GDP shrinking by 1.6 percent for the quarter. But Europe is hardly the only sick patient. Japanese government figures released Monday showed that the world’s third-largest economy has unexpectedly fallen back into recession, with GDP shrinking by 1.6 percent for the quarter.
Cameron’s decision to issue his warning may be motivated, at least in part, by domestic political challenges. Cameron will face voters in less than six months, and Britain’s economic recovery since he took office amid a recession in 2010 is at the core of his campaign for another five years in office. Cameron’s decision to issue his warning may be motivated, at least in part, by domestic political challenges. He will face voters in less than six months, and Britain’s economic recovery since he took office amid a recession in 2010 is at the core of his campaign for another five years in office.
By forecasting gloom for the globe, Cameron may be helping to manage expectations for a scenario in which Britain’s economy also begins to flag.By forecasting gloom for the globe, Cameron may be helping to manage expectations for a scenario in which Britain’s economy also begins to flag.
Britain’s economy has been relatively robust this year – especially compared with much of continental Europe. In his Guardian piece, Cameron cites Britain as the fastest growing economy in the G-7, with official forecasts of 3.5 percent growth for 2014. The British economy has been relatively robust this year, especially compared with much of continental Europe. In his Guardian piece, Cameron deems Britain the fastest-growing economy in the Group of Seven, with official forecasts of 3.5 percent growth for 2014.
But a revival in growth figures has not been enough to give him a lead in the polls. In most surveys, Cameron’s Conservatives are running just behind the Ed Miliband-led Labor Party, despite polls showing Miliband to be one of the most unpopular major party leaders in modern times. But a revival in growth figures has not been enough to give him a lead in the polls. In most surveys, Cameron’s Conservatives are running just behind the Labor Party, led by Ed Miliband, despite polls showing Miliband to be one of the most unpopular major-party leaders in modern times.
Labor has argued that despite economic growth and falling unemployment, wages have stagnated and the benefits of recovery have been concentrated too heavily among the country’s wealthiest.Labor has argued that despite economic growth and falling unemployment, wages have stagnated and the benefits of recovery have been concentrated too heavily among the country’s wealthiest.
Cameron uses Monday’s editorial to argue that Britain needs to stay the course, with a call for continuing austerity policies aimed at taming the deficit – although he also touts major investments in roads and rail systems. Cameron used Monday’s editorial to argue that Britain needs to stay the course, with a call for continuing austerity policies aimed at taming the deficit — although he also touts major investments in roads and rail systems.
“We cannot insulate ourselves completely, but we must do all we can to protect ourselves from a global downturn,” Cameron writes. “Working through the agenda at the G20, it was clearer than ever how vital it is that we stick to our long-term plan.” “We cannot insulate ourselves completely, but we must do all we can to protect ourselves from a global downturn,” Cameron writes. “Working through the agenda at the G-20, it was clearer than ever how vital it is that we stick to our long-term plan.”