A British minister has warned the current economic downturn will be worse than the Great Depression, reports said on Monday.
British Schools Secretary Ed Balls, a close ally of Prime Minister Gordon Brown, told a conference at the weekend that the crisis was the most serious global recession for “over 100 years,” according to the Yorkshire Post newspaper.
At the gathering in Yorkshire, he also raised fears of a resurgence in far-right groups as there was during the Great Depression.
“These are seismic events that are going to change the political landscape,” the newspaper quoted Balls as saying.
“I think this is a financial crisis more extreme and more serious than that of the 1930s, and we all remember how the politics of that era were shaped by the economy,” he said.
In what is being viewed as the gloomiest forecast yet by a senior minister, Balls said: “We now are seeing the realities of globalization, though at a speed, pace and ferocity which none of us have seen before.”
“The reality is that this is becoming the most serious global recession for, I’m sure, over 100 years, as it will turn out,” he said.
George Osborne, the finance spokesman for the main opposition Conservatives, said the remarks were “worrying” and contradicted government forecasts that the economy would recover by the second half of the year.
Britain is officially in recession for the first time since 1991, figures confirmed last month. In the last quarter of last year, the economy contracted by 1.5 percent to mark the sharpest slowdown since 1980.
A spokesman for Balls’ office sought to play down the comments, saying Brown and Finance Minister Alistair Darling had previously highlighted the unprecedented speed and ferocity of the crisis.
“The unprecedented global nature of this crisis and its impact on the global financial sector is affecting every single economy in the world,” he said.
Last week, Brown said the world was in a full-blown “depression,” but his office quickly scrambled to say it was a slip of the tongue.