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
ebooksA celebration of British elections
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Ashdown Group: Editor-in-chief - Financial Services - City, London

£60000 - £70000 per annum + benefits : Ashdown Group: A highly successful, glo...

Ashdown Group: Junior Application Support Analyst - Fluent German Speaker

£25000 - £30000 per annum + benefits: Ashdown Group: A global leader operating...

Guru Careers: Management Accountant

£27 - 35k + Bonus + Benefits: Guru Careers: A Management Accountant is needed ...

Guru Careers: Project Manager / Business Analyst

£40-50k + Benefits.: Guru Careers: A Project Manager / Business Analyst is nee...

Day In a Page

General Election 2015: ‘We will not sit down with Nicola Sturgeon’, says Ed Balls

'We will not sit down with Nicola Sturgeon'

In an exclusive interview, Ed Balls says he won't negotiate his first Budget with SNP MPs - even if Labour need their votes to secure its passage
VE Day 70th anniversary: How ordinary Britons celebrated the end of war in Europe

How ordinary Britons celebrated VE Day

Our perception of VE Day usually involves crowds of giddy Britons casting off the shackles of war with gay abandon. The truth was more nuanced
They came in with William Caxton's printing press, but typefaces still matter in the digital age

Typefaces still matter in the digital age

A new typeface once took years to create, now thousands are available at the click of a drop-down menu. So why do most of us still rely on the old classics, asks Meg Carter?
Discovery of 'missing link' between the two main life-forms on Earth could explain evolution of animals, say scientists

'Missing link' between Earth's two life-forms found

New microbial species tells us something about our dark past, say scientists
Ronald McDonald the muse? Why Banksy, Ron English and Keith Coventry are lovin' Maccy D's

Ronald McDonald the muse

A new wave of artists is taking inspiration from the fast food chain
13 best picnic blankets

13 best picnic blankets

Dine al fresco without the grass stains and damp bottoms with something from our pick of picnic rugs
General Election 2015: Ed Miliband's unlikely journey from hapless geek to heart-throb

Miliband's unlikely journey from hapless geek to heart-throb

He was meant to be Labour's biggest handicap - but has become almost an asset
General Election 2015: A guide to the smaller parties, from the the National Health Action Party to the Church of the Militant Elvis Party

On the margins

From Militant Elvis to Women's Equality: a guide to the underdogs standing in the election
Amr Darrag: Ex-Muslim Brotherhood minister in exile still believes Egypt's military regime can be replaced with 'moderate' Islamic rule

'This is the battle of young Egypt for the future of our country'

Ex-Muslim Brotherhood minister Amr Darrag still believes the opposition can rid Egypt of its military regime and replace it with 'moderate' Islamic rule, he tells Robert Fisk
Why patients must rely less on doctors: Improving our own health is the 'blockbuster drug of the century'

Why patients must rely less on doctors

Improving our own health is the 'blockbuster drug of the century'
Sarah Lucas is the perfect artist to represent Britain at the Venice Biennale

Flesh in Venice

Sarah Lucas has filled the British pavilion at the Venice Biennale with slinky cats and casts of her female friends' private parts. It makes you proud to be a woman, says Karen Wright
11 best anti-ageing day creams

11 best anti-ageing day creams

Slow down the ageing process with one of these high-performance, hardworking anti-agers
Juventus 2 Real Madrid 1: Five things we learnt, including Iker Casillas is past it and Carlos Tevez remains effective

Juventus vs Real Madrid

Five things we learnt from the Italian's Champions League first leg win over the Spanish giants
Ashes 2015: Test series looks a lost cause for England... whoever takes over as ECB director of cricket

Ashes series looks a lost cause for England...

Whoever takes over as ECB director of cricket, says Stephen Brenkley
Fishing for votes with Nigel Farage: The Ukip leader shows how he can work an audience as he casts his line to the disaffected of Grimsby

Fishing is on Nigel Farage's mind

Ukip leader casts a line to the disaffected