MercoPress. South Atlantic News Agency

UK dampens G-20 expectations and discards further stimulus option

Chancellor Alistair Darling

United Kingdom Chancellor Alistair Darling has moved to damp down expectations of a new budget stimulus for the global economy at the G20 summit in London, warning that all the world's problems would not “get sorted in one day”.

Mr Darling said that this week's gathering of world leaders was part of a “process” and that it was important not to be “overly optimistic” about what could be achieved.

His downbeat assessment came after a bruising week for Gordon Brown which saw his international tour to rally support for the summit hit by a series of warnings from other world leaders making clear they had little appetite for any new spending package.

The Prime Minister's attempt to lead the charge for a new global “fiscal stimulus” was effectively undermined when Bank of England governor Mervyn King warned that Britain could not afford another big increase in borrowing.

While Mr Darling insisted that there was agreement among governments on the need to support the world economy, he accepted that there would be no new budget stimulus in the final communiqué on Thursday.

“It is important but it is not the end of the process. It is part of a continuing process,” he told the BBC1 Politics Show. “It will be necessary for us, for other countries, to continue to do more. We have got to be realistic. We should not be overly optimistic that everything will get sorted in one day. It is a process.

”I think you will get an agreement that there does need to be stimulus in the world's economies, but at the end of the day it must be for individual governments to decide what they need to do in their own economies.“

His comments were echoed by Foreign Secretary David Miliband who said that there would be no ”rabbits out of hats“ at the gathering in London's Docklands.

Australian Prime Minister Kevin Rudd suggested that any substantive decisions on a new stimulus would have to wait for a future summit. ”A mechanism has been established for us to reflect on what we need for the future,“ he told BBC1's The Andrew Marr Show

”There will be a further summit, well in time for 2010 I assume, which will actually look at what metrics, what numbers, will be needed then”.