Eurozone recession could spread to UK

A RECESSION in the eurozone could tip Britain into the same plight, George Osborne warned today.

The Chancellor, in Brussels for talks with European counterparts, was speaking the day after warning Britain faces another six years of austerity and admitting the country’s finances are in an even worse state than feared.

Delivering a grim assessment in the Autumn Statement, Mr Osborne said the stalling economy meant the Government’s efforts to tackle the deficit would have to continue far beyond the next General Election.

He said: “If the eurozone goes into recession, into a deep recession, then I’m afraid Britain will find it difficult to avoid a recession itself, because people watching this programme will be going to work in companies that make things that they would normally sell to Germany, France, Italy and the like.

“That’s where Britain makes a lot of its money, so we are very affected by what happens in the eurozone.”

Meanwhile, it was forecast families and businesses across the UK would bear the brunt of more Government cuts until 2017.

Mr Osborne’s proposals included extra spending on capital projects and a £1 billion fund to help mid-sized firms to get the economy moving.

The number of public sector jobs set to be lost by 2017 has been revised up from 400,000 to 710,000.

But Mr Osborne promised more action to tackle rising fuel prices. Petrol and diesel prices were due to go up twice in the New Year but the Chancellor said he would limit this to just one 3p rise in August 2012.