[PEN-L:32855] UK anxiety at US economic gloom

[Chris Burford <cburford@xxxxxxxxxx>]

US slide prompts Bush purge
Treasury chief axed amid gloom


Saturday December 7, 2002 The Guardian



> Washington has been alive with rumours for months that Mr Bush was not
> happy with the increasingly vain attempts of his plain-speaking treasury
> secretary to talk up the stockmarket and the US economy.
>
> Interest rates have been cut 12 times over the last two years to a 41-year
> low of 1.75%, but the fragility of the US recovery was underlined by the
> surprise jump in the jobless rate yesterday to a nine-year high of 6%.
>
> The evidence of renewed weakness in the world's largest economy will cause
> alarm in Britain, where the chancellor, Gordon Brown, is counting on a
> strong international rebound, led by the US, to boost the UK.
>
> Mr Brown cut forecasts for growth this year and next in last week's
> pre-Budget report, but City economists and independent experts have warned
> that his downgraded estimates still look too optimistic. Labour's
> ambitious public spending plans could be at risk if the economy fails to
> notch up strong growth by 2004.