Profit warnings from listed companies are at their highest level since the 2008 credit crunch because of stock market and economic volatility and increased competition. Although companies are operating in a growing economy, more and more are issuing profit warnings because of increased competition and structural changes taking place in their sectors, as well as increased economic and market volatility.
The dramatic collapse in the price of oil led many firms in the sector to issue profit warnings. Half of the companies that provide services to oil and resources groups issued earnings alerts last year. Economists predict that the Office for National Statistics will say that the UK economy grew by 0.5 per cent during the fourth quarter of 2015, a slight improvement on the 0.4 per cent recorded for the third quarter.
George Osborne said that to ensure the UK remains on a sound economic trajectory and that 2016 should be a year of action on a number of fronts. "For as that Chinese saying goes, talk does not cook rice," he said. "In turbulent times we need action to deliver economic security at home. At its heart are sound public finances."
Reaffirming the Conservatives as the party for business, Mr Osborne made a dig at his political rivals. Mr Osborne's 20 minute speech covered a number of areas, including the need to reform global bodies such as the G20 and the World Trade Organisation to make sure they work towards a more competitive environment. He also touched on global markets, repeating his comments from a fortnight ago when he spoke of a cocktail of global risks.
"My main message on China is that we won’t rubberneck and fret about each new bump on the road. We are in it for the long haul. We are going to support China on the difficult route of economic reform that it is following."
All this comes at a time when the UK is suffering growth at less than 1% and inflation nearer deflation. China currently has a growth rate of over 6% per year, if only we could match that.