Britain must demonstrate that it is able to protect itself against contagion from economic slowdowns overseas, according to Chancellor of the Exchequer George Osborne.
In an interview with the BBC’s economics editor Robert Peston, Mr Osborne admitted that the UK economy is of course open to the impacts of turbulence in other nations.
He said: “While Britain is not immune to what is going on in the world, we can take steps to protect ourselves.”
Mr Peston pointed out the indications of a slowdown within Britain’s own economy, asking how concerned Mr Osborne is by such indications.
The chancellor replied that problems in the eurozone will inevitably affect the UK’s trade with Europe, but again stressed that steps are already being taken to safeguard GDP across Britain.
He also highlighted the government’s decision to issue Chinese-currency bonds as a way not of increasing the UK’s exposure to overseas markets, but of spreading that exposure over a wider area.
As such, he suggested, making such bonds available to China allows the UK to rely less heavily on near neighbours like France.
In an article to accompany the interview on October 9th, Mr Peston suggested that it is likely the current phase of GDP recovery in the UK is past its peak, and that manufacturing prospects in particular will be dampened by poorer performance in export markets.
“How bad will it be for Britain? It is too early to say – although the IMF thinks our rehabilitation is fairly solid,” he wrote.
“The chancellor would not be drawn on whether any slowdown would yet again knock his plans to reduce the public sector’s still hefty deficit.”
“And for the avoidance of doubt, it is by no means all doom and gloom,” he continued, noting at least one “busy busy exception” in the organic cosmetics industry, where exports are booming.