'Stuck in a rut' eurozone a threat to British businesses: Osborne urges British companies to explore new markets beyond Europe

George Osborne yesterday said the crisis-torn eurozone is the ‘greatest immediate economic risk’ to the UK.



The Chancellor told business leaders that British firms need to explore new markets in fast-growing regions beyond Europe.



‘The greatest immediate economic risk to us is the very very weak growth of the eurozone,’ he said.



Warning: George Osborne said the crisis-hiteurozone is the 'greatest immediate economic risk' to Britain

Half of British exports go to the European Union, including 45 per cent to the single currency bloc.



Last year the UK exported £12.4billion worth of goods to China, up 18 per cent on 2012 and 34 per cent on 2011. More than £150billion of goods were sold to Europe, including £30billion to Germany and £21billion to France where the economy has ground to a halt. Exports to the EU rose by just 1.6 per cent in 2013 but were down 3.3 per cent on 2011.



‘The thing that’s the most obvious weakness in the British economy is our export performance,’ Osborne told the Institute of Directors’ annual convention in London. ‘We have not connected ourselves enough with the big fast-growing economies in Asia, South America and the like.



‘Too many of our small and middle-sized businesses have felt daunted about entering into export markets.’



The Chancellor’s comments came after the International Monetary Fund warned that the global recovery is ‘brittle and uneven’ – with the UK and the US leading the way among the major developed nations and the eurozone lagging behind.



Figures yesterday suggested the UK economy grew by 0.8 per cent in the third quarter of the year following expansion of 0.9 per cent in the previous three months.

Markit said its index of activity in the UK, where 50 is the cut-off between growth and decline, fell from a nine-month high of 59.7 in August to a six-month low of 58.1 in September.



Chris Williamson, chief economist at Markit, said: ‘The surveys are signalling GDP growth of 0.8 per cent in the third quarter, down from 0.9 per cent in the three months to June but still robust by historical standards and signalling a continuation of the UK’s strong economic growth spell.



‘There are signs, however, that economic growth could slow further in the fourth quarter.’



The eurozone clocked up a score of just 52, its worst so far this year, as downturns in France and Italy dragged the region down.



The Republic of Ireland scored an impressive 60 in September while Spain hit 55.3 and Germany achieved 54.1.



But output in Italy and France fell again, with Italy scoring 49.5 and France a dismal 48.4.

