British Finance Minister Gordon Brown warned Monday the global economy was facing the most uncertain outlook in recent history, but ruled out any watering down of the Labor government's ambitious spending plans.
"The uncertainties facing the world economy are unprecedented in number and they are more widespread than at any time in recent economic history," the chancellor of the exchequer told business leaders gathered here.
Brown cited events in Iraq, high oil prices, problems in the technology sector, concerns about corporate standards and the risk posed by economic instability in Latin America as factors clouding the outlook.
Brown told delegates at the annual conference of the Confederation of British Industry that spending cuts in the current climate would be counter-productive by damaging growth and stability.
Just two days before delivering his annual mini-budget, the pre-budget report, Brown said: "When inflation is low and debt is low, such a narrow and short-termist interpretation of stability would be damaging and counterproductive to growth. There is no credible and prudent option other than setting fiscal policy in a sound and long framework adjusting for the economic cycle."
Brown may concede in today's report that his forecasts for economic growth and the public finances will not be met.
Economists reckon the global economic slowdown will force Brown to cut his forecast for economic growth in 2002 to around 1.5 percent to 2 percent against his March Budget forecast of 2 percent to 2.5 percent.
Brown is also expected to downgrade expectations for growth next year to 2.25 percent to 2.75 percent from 2.5 percent to 3 percent previously.
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