US government shutdown is risk to world economy: British PM

AFP, Tuesday 1 Oct 2013

United States inability to sort out its spending risks slowing growth and influences world economy

The United States' federal government shutdown could endanger the fragile world economy, British Prime Minister David Cameron warned on Tuesday.

"It is a risk to the world economy if the United States can't properly sort out its spending plans and its deficit reduction plans," Cameron told BBC radio after the US Congress failed to agree a budget, forcing the first federal government shutdown in 17 years.

Economists have warned that the shutdown, forcing 800,000 federal workers to go on leave and closing museums and national parks until the row is resolved, could slow growth in the world's largest economy.

Cameron added: "I think also it's a reminder to us here that you have to have a multi-year, long-term plan for getting deficits down."

Britain's Conservative-led coalition government has made steep public spending cuts since it came to power in 2010 in a bid to slash Britain's deficit.

Finance minister George Osborne vowed on Monday that he will run a budget surplus if the Conservatives are still in power after the next election in 2015, but admitted that could force his government to extend its austerity programme for several more years.

Short link: