A mixture of problems including sharp currency fluctuations has led to uncertainty about how strong and durable the world recovery will prove, British finance minister Gordon Brown said yesterday.
In a speech to British business leaders, the Chancellor of the Exchequer said that instead of the hoped-for calm, every company and country was facing a new set of challenges such as the recent sharp fluctuations in currency markets.
"All of you are having to cope with the doubling of oil prices, rising world commodity prices, uncertainty in the Middle East, large current account imbalances between Europe, Asia and America and the changing values of the dollar, euro and pound," Mr Brown said.
"And thus uncertainties about the strength and durability of the world recovery."
French finance minister Nicolas Sarkozy, in Birmingham for the same Confederation of British Industry conference, also highlighted the risks posed by the gaping US current account deficit.
Asked by reporters whether he was concerned by the dollar's fall against the euro, he said it was the US deficit that was a cause for anxiety.
The European Commission said yesterday that eurozone finance ministers would discuss the latest exchange market developments next week, adding that it shared European Central Bank President Jean-Claude Trichet's on currency market moves.
"I think the position of Mr Trichet is of course shared by the Commission and the member states that excess volatility and disorderly movements in exchange rates are undesirable for economic growth," a Commission spokesman said.
In Berlin, German Economy Minister Wolfgang Clement said that he thought ECB policymakers would take action on the euro's exchange rate if they thought it necessary.
The euro hit a record high against the dollar on Monday of $1.2985 but has since fallen back below $1.29 following weak eurozone economic data.
Mr Brown also told the CBI that despite the rising uncertainties to the global outlook, Britain was still in a position to meet its spending commitments while sticking to its fiscal discipline.
"We will continue to meet all our fiscal rules in this cycle and next," Mr Brown said. His "golden rule" states that he only borrows to invest over the economic cycle.
Some analysts have said that Mr Brown is in danger of breaking this rule and may have to raise taxes some time after the next general election, which is expected in May.
Mr Brown said he would use the pre-budget report, expected in the next few weeks, to promote greater enterprise and cut down on red tape and that he planned to form a new transatlantic partnership on business creation when US Treasury Secretary John Snow visits next week.
The Treasury would also host a conference of business leaders from around the world, attended by Federal Reserve chairman Alan Greenspan, on February 4 next year, when Britain will hold the rotating presidency of the Group of Seven major industrialised countries.