George Osborne cuts short holiday to deal with stock market crisis

George Osborne is flying back from his California holiday to address MPs on the state of the economy on Thursday George Osborne is to return from his holiday in California to address MPs about the state of the economy on Thursday, when parliament is being recalled following the riots across London. The Treasury did not release information about what the chancellor intended to say but he will be speaking the day after the Bank of England is widely expected to reduce its growth forecast for the UK. Osborne is expected to address MPs after the prime minister, David Cameron, has made a statement about the public unrest that began on Saturday. On Wednesday the Bank is expected to predict in its quarterly inflation report that GDP this year will not rise by as much as the 1.8% it had forecast in May. Forecasts for GDP growth have been falling since data showing the economy grew just 0.2% in the second quarter. While economic growth is slowing, the Treasury has been insisting that the chancellor’s tough austerity measures are working because the UK has retained its AAA credit rating while the US has been stripped of its top notch ranking by Standard & Poor’s. Even so, the stock market has been tumbling and last week endured trading patterns last experienced in the immediate aftermath of the collapse of Lehman Brothers in 2008. The triple point fall in the FTSE 100 index on Monday was the first time in the 27 years of the blue chip index that the market had lost 100 points or more on four consecutive days. Banking stocks, including those of bailed-out Royal Bank of Scotland and Lloyds Banking Group, have borne the brunt of the downturn in the markets and at their lows on Tuesday were creating losses of the taxpayer of £35bn on the £65bn investment in the two banks. In the past two weeks, the FTSE 100 has lost nearly 16% of its value. Gold is today enjoying its biggest rally since 2008 as investors seek safe havens from the crisis in the eurozone and fears about the strength of the US economy. George Osborne Financial crisis Global recession Banking Stock markets Bank of England London Jill Treanor guardian.co.uk

Posted by on August 9, 2011. Filed under News, Politics, World News. You can follow any responses to this entry through the RSS 2.0. You can skip to the end and leave a response. Pinging is currently not allowed.