Vince Cable warns of 'economic H-bombs’ that threaten Britain

The Business Secretary has angered MPs with his comments about the economy

Vince Cable warned  yesterday that ‘hydrogen bombs’ in the economy are set to plunge Britain into new economic disaster.

The Business Secretary was accused of talking down the recovery after telling the New Statesman magazine that governments had not ‘got to grips’ with  problems in the economy.

The comments put Mr Cable on a collision course with Chancellor George Osborne, who has repeatedly insisted that Britain was out of the ‘danger zone’.

Mr Cable said: ‘I think the thing that worries me more than anything else [is that] we really haven’t engaged with the real depths and seriousness of the financial crash.’

He quoted financier Warren Buffett, saying he was ‘very impressed’ by the billionaire’s warning ‘that asset-backed mortgage lending was the atomic bomb, and that there are hydrogen bombs out there’.

He added: ‘I just don’t think that collectively governments have got to grips with this at all.’ Asked if one of the ‘bombs’ could go off, Mr Cable said: ‘It’s not imminent. But you can see this happening.’

He also warned that the banks’ failure to lend more to small businesses was storing up problems.

It is the second time in the space of a week that Mr Cable has been in hot water for making inflammatory comments about the financial system.

He was reprimanded by Mr Osborne on Tuesday after he said Greece will have to reschedule its debt. In a rare admission of his weaknesses, Mr Cable admitted yesterday that he and his Liberal Democrat colleagues were no good at politics.