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'Positive trends' behind market volatility: UK Fin Min

There are "positive trends" for the global economy in the current market volatility, U.K. chancellor of the exchequer George Osborne has told CNBC.

Speaking to CNBC in Davos, Osborne said that while he is looking "with some concern" at what is going on in world markets, underlying that are trends that will benefit the global economy.

"Internationally we need a big of a sense of perspective which is, underlying all this volatility are some transformations and transitions which are fundamentally good for the world – China becoming a more consumption based economy, energy being cheaper…in the European Union and the euro zone, the European Central Bank ready to…step in and support the euro zone," Osborne told CNBC in a TV interview.

"Because of the very sharp falls in the oil price the markets are unstable…but fundamentally for most western economies…the fall in the price of energy is a good thing."

George Osborne with CNBC's Julia Chatterley in Davos, Switzerland in January 2016.

EU referendum

One uncertainty hanging over the U.K. economy is the potential for a "Brexit" – Britain leaving the European Union (EU). U.K. prime minister David Cameron said on Thursday that he was in "no hurry" to call a referendum if the terms of the renegotiation of Britain's relationship with the EU was not right. A referendum on whether the U.K. will stay in the EU could be as early as this summer.

While some have argued that a brexit would harm business in Britain, Osborne denied that the prospect of a referendum has damaged the country's economy.

"I don't think it's harming the U.K economy because the most recent numbers this week show we're creating jobs, employment is at a record high, we are getting a lot of investment. Do I think getting this relationship right…is important to our economy, yes I do," Osborne said.

"Within a reformed EU and with proper protection for countries like Britain that aren't in the euro, we can have that European Union."

UK tech in focus

The Chancellor also talked about the U.K.'s growing tech scene which is one of the most vibrant in Europe. Britain has the most number of unicorns – start-ups valued at over $1 billion – in Europe.

Venture capitalists invested a record $3.6bn (£2.46bn) in the U.K. tech scene in 2015, up 70 per cent from the year before, according to London and Partners, the city's promotional company.

But when asked why the country has not produced any companies the size of Spotify, Osborne said that the slow progress on the EU's digital single market has hampered the abilities to grow to that size.

"I think it might be something to do with the fact that Europe has not been able to create a digital single market and we're working hard at trying to do that. Frankly, I think it's all taken far too long, it's far too slow," Osborne said.

"But if you could create that digital single market, you'd have 500 million odd customers to sell into."

The digital single market is an EU project to harmonize rules across the 28-nation bloc in areas such as access to content and copyright.


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