Cameron warns Britain's recovery faces 'real risk'

[LONDON] Prime Minister David Cameron on Sunday warned Britain's economic recovery faced a "real risk" from instability in the world economy fuelled by Middle East unrest, Ebola, Ukraine and stalled trade talks.

In an article on The Guardian website that will appear in Monday's edition of the newspaper after the G-20 summit, Mr Cameron said that "red warning lights are once again flashing on the dashboard of the global economy".

He also said the eurozone was "teetering on the brink of a possible third recession" and pointed to "a dangerous backdrop of instability and uncertainty" in the world economy.

"Wider problems in the global economy pose a real risk to our recovery," he said, adding: "We cannot insulate ourselves completely but we must do all we can to protect ourselves from a global downturn".

Growth of the British economy slowed in the third quarter of this year, with gross domestic product (GDP) rising 0.7 per cent between July and September from output in the previous three months.

The economy had expanded by 0.9 per cent during the second quarter, and by 0.7 per cent in the first quarter.

But despite the slowdown, the British economy still looks more dynamic than the eurozone, where growth is sluggish and deflation threatens.

According to the European Commission's autumn economic forecast, output in Britain will grow by about 3.1 per cent this year, higher than a previous prediction of 2.7 per cent, then 2.7 per cent next year and 2.5 per cent in 2016.

That contrasts with 0.8 per cent for the 18-country eurozone, which is lower than a previous prediction of 1.2 per cent.

The Bank of England last week trimmed its forecast for British growth, citing economic strains in the neighbouring eurozone.

It forecast that GDP would expand 2.9 per cent next year, down from a previous estimate of 3.0 per cent.

The BOE still expects expansion of 3.5 per cent this year.

AFP