Britain's Economy: Prime Minister Gordon Brown "Cautiously Optimistic"
Prime Minister Gordon Brown has told Scottish business leaders tonight that he is "cautiously optimistic" about Britain's economy.
The Chancellor's words unnerved investors and the pound slumped to its lowest level against the euro on Monday to the dismay of Mr Brown who has always maintained that Britain was better placed than other countries to weather the downturn.
Mr Brown told Scottish business leaders: "While never complacent about our economic prospects, I am also cautiously optimistic about the long-term resilience and underlying strengths of the British economy.
"Because at root our economy today is better placed to weather any global economic storm than it was in the 1970s, 80s or early 90s."
Mr Brown said there was "a unique set of events affecting every major advanced economy."
Mr Darling claimed that he was talking about the world economy, not just Britain's, in his interview last weekend in which he also said the effects of the credit crunch would be more profound and last longer than people expected.
But he also warned that "oil and food price shocks" demanded that Britain had a new response to the problems.
He told the CBI in Glasgow: "So today I set a new ambition to free Britain from the dictatorship of oil. The policies we are putting in place will mean that by 2020 our economy will consume 20 per cent less oil for each unit of output than it consumes today - and only a quarter of the oil we used in 1970." [q/]
Chancellor Alastair Darling caused a party political row when he announced that the UK faced a severe recession. However, the Chancellor's prediction has strong backing from the OECD, and last month the Financial Services Authority, the banking and financial service industry regulator, announced a two-year recession ahead for Britain. The OECD expects the US and Japanese ecomomies to show a growth.
BRITAIN will be the only one of the world’s seven richest nations to slide into recession this year, experts warned last night. The grim prediction was made by the respected Organisation for Economic Co-operation and Development. The Paris-based think-tank partly blames the slowdown in the housing market for the UK becoming the sick man of the G7 group of the world’s most powerful countries. The forecast came as the pound hit lows against the euro and dollar. Analysts blamed sterling’s crash on Chancellor Alistair Darling’s weekend declaration that we face the worst economic crisis for 60 years. The OECD said our economy will shrink 0.3 per cent in the third quarter of this year and by 0.4 per cent in the final quarter. Two quarters of negative growth mean Britain will officially be in recession. In contrast, the US will see growth of 0.9 and 0.7 per cent, while in Japan the figures will be 2.4 and 1.4 per cent. Britain will also be outperformed by the three other European G7 countries.