Clarke warns on economy

KEN Clarke yesterday said the British economy was “in grave danger of financial collapse”, in comments that are likely to annoy Number 10.

Speaking to the Prison Governors’ Association, the justice secretary added: “We have rescued ourselves for the moment from being bracketed with the weaker brethren with doubts about our credit rating… but if we fail to deliver the kind of programme we have set out we will be back there all too soon.”

Officials insisted Clarke’s comments did not put him at odds with the Prime Minister, who recently said Britain was “out of the danger zone”, arguing both agree that the health of the economy depends on the government’s austerity measures.

But Labour said Clarke’s comments, which come shortly after he warned of a double-dip recession, were in danger of talking down the British economy.