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Darling warns G20 stimulus must continue

Chancellor Alistair Darling has warned the heads of the G20 not to abandon their fiscal stimulus packages too early or risk further economic downturn.

In an interview with the Independent, Darling warned that it may be too soon for the likes of France and Germany to be discussing exit strategies at the latest meeting of the G20 in Pittsburgh at the end of the month.

Darling says: “My view is that the biggest single risk to recovery is that people think the job is done.

“There is a real risk that either governments or people generally think ’We have done that, we are on the path to recovery’.”

Darling says he is concerned that French President Sarkozy and German Chancellor Angela Merkel will look to cease rescue packages after their countries both recorded economic upturns in the last quarter. He says the G20 must look to now stimulate employment – the UK has recent launched a £5bn package to curb rising unemployment.

He says: “There are encouraging signs that the joint action we have taken in the last 10 months or so is having an effect. We are beginning to see the fruits of that action. But it is too early yet [to abandon it]. We must not get ahead of ourselves.”


Old Mutual friend

The bond market remains a hot topic in investment circles and I have recently had two very interesting conversations with Stewart Cowley, head of fixed interest at Old Mutual and manager of the Old Mutual global strategic bond fund.


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