Prime Minister David Cameron has warned that “red warning lights are flashing on the dashboard of the global economy”, threatening another recession.
At the close of the G20 summit in Brisbane, Cameron wrote of “a dangerous backdrop of instability and uncertainty”, with the UK’s receovery hampered by the slowdown in the Eurozone.
In an article for the Guardian, he wrote: “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 added: “Emerging market economies which were the driver of growth in the early stages of the recovery are now slowing down. Despite the progress in Bali, global trade talks have stalled while the epidemic of Ebola, conflict in the Middle East and Russia’s illegal actions in Ukraine are all adding a dangerous backdrop of instability and uncertainty.”
Meanwhile, Cameron also insisted he had “no plans” to raise VAT.
Cameron has pledged to raise the personal tax allowance to £12,500 and to increase the top rate threshold £50,000. At a G20 press conference in Brisbane this weekend he was asked whether he would be raising VAT to pay for it.
“We don’t have any plans to do that because we don’t want to see taxes go up,” said Cameron, who also reiterated the government’s plans to reduce the deficit to zero by 2018.