Darling's oil price warning

THE Chancellor, Alistair Darling, today warned that the rising price of oil could put the brakes on the UK's economic recovery.

While sticking to his prediction that the recession would end towards the end of this year, he warned that a high and volatile oil price "has the potential to be a huge problem as far as the recovery is concerned."

He made the comments as oil prices moved above $73 a barrel. However, he said he hoped Gulf states would see it was in their interests to lower prices to encourage recovery.

The Chancellor is also understood to be concerned about the speed of banking reform in some European countries – a concern he will have the chance to air at the Group of Eight finance ministers meeting in Italy this weekend.