Chancellor warns of UK slowdown

The chancellor is no mug when it comes to seeing potential holes in the road ahead.

That said, the holes have been pretty loudly flagged up - the IMF warned earlier this week that there is a 40% risk of the eurozone slumping back into recession and of a danger that China's housing bubble will have an unhappy ending.

So today, George Osborne has said, in an interview with me, that the UK cannot and will not be immune to a slowdown in global economic growth that looks unavoidable.

Or to put it another way, the oomph will fade from the UK's strong recovery - we are probably past the peak of this phase of the UK's growth in GDP or national income.

The most conspicuous manifestation of the slowdown is a near record 5.8% plunge in German exports in August - a potentially serious setback to recovery in Europe's biggest and strongest economy.

As for Italy, the prospect of imminent escape from its prolonged malaise seems remote.

And France, where I am making a BBC2 film on whether its enviable state-funded lifestyle is affordable and sustainable, seems trapped in a pincer of stagnating national income and rising national debt.

Deficit

So with the eurozone still the UK's biggest export market and China arguably our best export prospect, the recent boom in British manufacturing will be dampened.

How bad will it be for Britain?

It is too early to say - although the IMF thinks our rehabilitation is fairly solid.

The chancellor would not be drawn on whether any slowdown would yet again knock his plans to reduce the public sector's still hefty deficit.

And for the avoidance of doubt, it is by no means all doom and gloom.

I interviewed George Osborne in the offices of an organic cosmetics business in West London, Pai - whose owner and boss Sarah Brown tells me exports are booming, even in France.

That said, if Pai proves to be a busy busy exception, and UK growth does decelerate, then the moment when the Bank of England raises interest rates by a fraction of a fraction of a percentage point will be delayed further into next year