Britain’s recovery is “not yet secure” despite rising growth and falling unemployment and is vulnerable to economic turmoil around the world, George Osborne will warn today.
The Chancellor will say it would be a “huge mistake” for him to declare “job done” in next month’s Budget, making clear that he is not about to loosen the nation’s purse strings.
Ministers have been heartened by evidence the economy is bouncing back surprisingly strongly after nearly four years, but Mr Osborne will caution against complacency.
Speaking to business leaders in Hong Kong, he will warn: “As well as reasons to be cheerful, there are also reasons to be careful.”
He will point to threats to Britain’s security from problems in other economies, particularly in the emerging markets.
“If we have learnt anything from the recent Great Recession, it is that in this interconnected global economy one country’s problem can very quickly become everyone else’s problem.”
Mr Osborne will say Britain has the fastest-growing major economy in Europe and the largest growth in employment levels in its history, but he will add: “Some in Britain might be tempted to say: 'job done, let’s avoid more hard decisions'. That would be a huge mistake. Abandon the plan and we abandon the progress we’ve made and go back to square one.”
There is no alternative to carrying on cutting the nation’s debts, increasing investment and boosting exports, he will insist.
“I’m now the first to say the recovery is not yet secure and our economy is still too unbalanced,” he will say.
Chris Leslie, the shadow Chief Secretary to the Treasury, said: “George Osborne is finally recognising that the recovery, which he choked off in 2010, is still not secure or balanced. But he has not yet admitted working people are facing a cost-of-living crisis.”