UK minister sees growth rate cuts

Britain's business secretary Vince Cable warned that growth forecasts are likely to be slashed this week, adding to fears that the UK is tumbling towards a double dip recession, as global markets are expected to open heavily down on Monday.
In an interview with the Sunday Times, Cable admitted that UK growth forecasts will "almost certainly" be downgraded this week, as the Bank of England's latest quaterly inflation report is likely to confirm disappointing growth at home.
The debt crises on either side of the Atlantic, with the latest shock coming from the US credit rating downgrade, are wreaking market turmoil and stoking fears of the affluent world sliding back into recession.
Britain's Prime Minister David Cameron conferred with French President Nicolas Sarkozy, who chairs the G7/G20 group of leading economies, on Saturday, with world leaders battling to find a solution to the eurozone debt crisis this weekend.
"They discussed the euro area and the US debt downgrade. Both agreed the importance of working together, monitoring the situation closely and keeping in contact over the coming days," a spokesman for Cameron said.
In Washington, a White House economic adviser castigated ratings agency Standard and Poor's for cutting the US credit rating to AA-plus from AAA. The US Treasury said the rating agency's debt calculations were wrong by some $2 trillion.
A spokesman for the Treasury said on Saturday that the action taken by Standard and Poor's justified Britain's approach to tackling its budget deficit.
"Because of the decisions the government has taken to deal with our debts and support a sustainable recovery Britain's credit rating has been reaffirmed, helping to keep the cost of borrowing down for taxpayers, homeowners and businesses," he said.
"This is yet another illustration of why abandoning our deficit reduction plan would put Britain back in thee international firing line". In the Sunday Times interview, Cable said that Britain could fall back into a recession unless banks did more to help, but insisted that Britain was well placed to weather the global storm and rejected parallels being drawn to the financial crisis of 2008.
"Back then, Britain was at the centre of the hurricane. This time around we are on the edge of the storm," he said.
"The top priority now, to boost growth and jobs, and avoid a double dip, is making the banks lend again." Britain's economy slammed into reverse at the end of last year and weak economic data have raised fears that GDP may have contracted again in the second quarter.
Many economists expect GDP growth over 2011 as a whole will be no better than 1 percent, little more than half the 1.7 percent forecast by the government's fiscal watchdog in March and the 1.8 percent forecast by the Bank in May. This was aleady a downgrade revision on its February forecast.
A looming downgrade is sparking fears that the government's deficit reduction plan will be derailed, due to receiving less tax and facing a higher bill for the unemployed, the Sunday Times said. "People's living standards have been quite badly hit. That is only going to change if we get sustainable growth. It's too difficult to say when," added Cable.