When George Osborne met Christine Lagarde: US and eurozone weakness could hit UK warns Chancellor as IMF chief visits London

The Chancellor, George Osborne, greeted the managing director of the International Monetary Fund, Christine Lagarde, at 11 Downing Street yesterday.

Ms Lagarde issued a warning in the Richard Dimbleby lecture earlier this week over rising income inequality around the world and said competition between states to lower corporation tax rates was exacerbating the problem.

Meanwhile, Mr Osborne has identified economic weakness in America and Europe as a potential threat to the UK's recovery.

Speaking to the House of Lords Economic Affairs Committee, the Chancellor singled out economic risks emanating from abroad, and said: "I would draw your attention to the weakness of some of the eurozone economies, which remains a cause of concern, and some of the US data in the last couple of weeks, which has been a bit soft."

The British economy grew by 1.9 per cent in 2013, its fastest rate of growth since 2007, and a further 2.7 per cent expansion is forecast this year. The eurozone emerged from its double dip recession last year, but unemployment in the bloc remains painfully high at 12 per cent. Growth is projected at just 1.1 per cent in 2014.

The US grew at an annualised rate of 3.2 per cent in the final quarter of last year, but amid concerns about the impact of the Federal Reserve's "taper" of its asset purchases. America's ISM manufacturing index dropped to an eight-month low of 51.3 in January, still above the 50 point that indicates growth, but well below expectations.

The US economy only created 74,000 jobs in December, against the previous four-month average of 214,000.

Andy Haldane, the Bank of England's executive director of financial stability, also issued a warning yesterday over recent financial shocks in emerging markets. "Individual countries act in their own best interests without taking into account the broader best interest of the financial system as a whole," he said in a speech at Oxford University. "What is going on with the head-to-head combat is people pursuing policies of individual countries. What is at stake is the system as a whole."

The latest Markit survey of the UK's construction sector yesterday showed activity hit its highest level since August 2007 in January. Its construction purchasing managers' index rose to 64.6 in January, up from 62.1 the previous month.

Start your day with The Independent, sign up for daily news emails
PROMOTED VIDEO
ebooks
ebooksA special investigation by Andy McSmith
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Compliance Assistant

£13000 per annum: Recruitment Genius: This Pension Specialist was established ...

Ashdown Group: Market Research Executive

£23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

Recruitment Genius: Technical Report Writer

£25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

MBDA UK Ltd: Indirect Procurement Category Manager

Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

Day In a Page

Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

Isis hostage crisis

The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

Maverick artist Grayson Perry backs our campaign
Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

The runaway buccaneers and the ship full of gold

Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

Assisted Dying Bill: 'I want control of my life'

This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
Move over, kale - cabbage is the new rising star

Cabbage is king again

Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
11 best winter skin treats

Give your moisturiser a helping hand: 11 best winter skin treats

Get an extra boost of nourishment from one of these hard-working products
Frank Warren column: No cigar, but pots of money: here come the Cubans

Frank Warren's Ringside

No cigar, but pots of money: here come the Cubans
Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

Isis stands strong as its numerous enemies fail to find a common plan to defeat it

The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

Virtual reality: Seeing is believing

Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
Homeless Veterans appeal: MP says Coalition ‘not doing enough’

Homeless Veterans appeal

MP says Coalition ‘not doing enough’ to help
Larry David, Steve Coogan and other comedians share stories of depression in new documentary

Comedians share stories of depression

The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
Has The Archers lost the plot with it's spicy storylines?

Has The Archers lost the plot?

A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
English Heritage adds 14 post-war office buildings to its protected lists

14 office buildings added to protected lists

Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

Scientists unearthed the cranial fragments from Manot Cave in West Galilee
World War Z author Max Brooks honours WW1's Harlem Hellfighters in new graphic novel

Max Brooks honours Harlem Hellfighters

The author talks about race, legacy and his Will Smith film option to Tim Walker