George Osborne’s failure to build a broader economy leaves us exposed to instability in ChinaThe last financial crisis demonstrated the impact that global market turbulence can own on the UK economy. This time,it is worries over China’s slowing momentum that could own serious implications for British businesses and consumers and for George Osborne’s much delayed deficit reduction plan.
British banks are particularly exposed to instability in China – recent figures from the Bank for International Settlements showed them holding a staggering 28% of all China’s abroad loans, more than those of any other country. In a worst-case scenario, or if enough of these loans fade wicked it could own an impact not only on those banks’ profitability and share price,but also on their ability to lend in Britain. Figures from the Office for Budget Responsibility note that once again we are increasingly reliant on rising household debt, so without more savings or export-led growth – which the chancellor has made little progress with – the health of the financial sector to lend really matters.
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Source: theguardian.com