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Osborne concedes 'harder' recovery

Chancellor George Osborne has conceded that Britain's economic recovery will be "longer and harder" than hoped amid renewed turmoil on global markets.

He defended the Government's efforts to tackle the deficit, which he said had made the country a "safe haven" for investors even if UK PLC was not immune to the international storm.

Global markets rallied by the close but only after another volatile day marked by wild swings that saw the FTSE 100 drop below the psychologically-important 5,000 mark again.

It closed 156 points, or 3%, higher at 5163 as a strong opening for US shares turned sentiment around and fears over the health of European banks eased.

News that French president Nicolas Sarkozy will meet German chancellor Angela Merkel on Tuesday to discuss Europe's financial plight also helped the mood.

In a statement to the Commons - recalled to debate this week's rioting - Mr Osborne warned that the world faced its most dangerous moment since the credit crunch hit in 2008.

"The whole world now realises that the huge overhang of debt means that the recovery will take longer and be harder than had been hoped," he told MPs.

"Markets are waking up to this fact and that is what makes this the most dangerous time for the global economy since 2008."

Shadow chancellor Ed Balls said: "Here in Britain families and businesses, deeply worried about their jobs and mortgages, will hear your talk of 'safe havens' and conclude you are either deeply complacent or in complete denial about what is going on in our country."

He added: "We do need a tough, medium-term plan to get our deficit down ... but it is your reckless policies, too far and too fast, that have ripped out the foundation of the house and left our economy deeply exposed to this brewing global hurricane."


From Belfast Telegraph