Osborne: UK economy faces a 'dangerous cocktail' of risks in 2016

Ireland's closest neighbour has been warned that tough times could be ahead...

Osborne: UK economy faces a 'dangerous cocktail' of risks in 2016

The Chancellor of the Exchequer George Osborne outside No 11 Downing Street, London, before delivering the Budget Statement in the House of Commons (Press Association)

The British economy could be badly damaged in 2016 by a "dangerous cocktail" of risks abroad or higher public spending at home, George Osborne will warn today.

The Chancellor will claim the economy could be dragged into decline by economic problems in China, Brazil or Russia, falling oil prices or the political crisis in the Middle East, according to Sky News.

In a speech to business leaders in Cardiff, he will warn against complacency or a sense of "mission accomplished," despite the economy performing "better than almost anyone dared to hope."

Attacking Labour's Jeremy Corbyn and Shadow Chancellor John McDonnell, he will say Britain must not "go back to the bad old ways" of spending beyond its means or more "debt-fuelled public spending."

Mr Osborne will say: "Anyone who thinks it's mission accomplished with the British economy is making a grave mistake. 2016 is the year we can get down to work and make the lasting changes Britain so badly needs.

"Or it'll be the year we look back at as the beginning of the decline. This year, quite simply, the economy is mission critical."

On risks from overseas, Mr Osborne will say: "Last year was the worst for global growth since the crash and this year opens with a dangerous cocktail of new threats.

"For Britain, the only antidote to that is confronting complacency and sticking to the course we've charted."

He will point to the slowdown in China, problems in Brazil and Russia, the slide in commodity prices, the risk of stagnation and political developments in the Middle East as potential hazards.

Mr Osborne will say the UK's strong economic performance is "sadly lacking" in many other parts of the world and that the IMF believes world growth in 2015 was the slowest since 2009, the height of the Great Recession.

If problems in emerging markets persist, or market volatility continues, global growth in 2016 could be much the same, he will claim.

"Yes - there's good news here and right across the UK," Mr Osborne will say.

"That's because we have a national economic plan that backs business and skills, and is delivering growth, high employment, and rising wages.

"But as we start 2016, I worry about a creeping complacency in the national debate about our economy.

"A sense that the hard work at home is complete and that we're immune from the risks abroad. A sense we can let up, and the good economic news will just keep rolling in."

On falling oil prices, Mr Osborne will say: "That is good for consumers and business customers here in Britain, bad news for the oil and gas industry, worrying for the creditors who have lent to it, and a massive problem for the countries that depend on it.

"Meanwhile, the political developments in the Middle East, with Saudi Arabia and Iran, concern us all.

"Yes, the British economy has performed better than almost anyone dared to hope. And as an issue, the economy has slipped down the list of many people's everyday concerns. But the biggest risk is that people think that it's job done."

In an attack on Mr Corbyn and Mr McDonnell, Mr Osborne will say: "Many in our politics encourage this, irresponsibly suggesting that we can just go back to the bad old ways and spend beyond our means for evermore.

"Though the year is only seven days old, already we hear their predictable calls for billions of pounds more debt-fuelled public spending. They reject all the reforms we propose to deliver better quality public services for less taxpayers' money.

"Today I want to issue this warning: unless we finish the job of fixing the public finances, to get Britain back into the black by finally spending less than we borrow, all of the progress we have made together could still easily be reversed."