Davos 2016: George Osborne urges 'political will' to deal with rocky transition of global economy

George Osborne will warn the effect the current market turmoil will have on the global economy as "tectonic plates of the global economy" are sending tremors through markets at the World Economic Forum (WEF) in Davos on 22 January.

In a speech, published before the chancellor takes the stage, he will echo his previous warnings of the UK's vulnerability to global economic problems. Earlier in January, he said the global economy was facing a "dangerous cocktail" of threats

However, Osborne will argue global leaders should play a key role in the shift in the global economy. "These are the shifting tectonic plates of the global economy," he will say. "So since we all know they are shifting, we should also know that those shifts create tremors. The question for all of us here is: do we just talk about this transition – or do we take the action, and show the political will, to adjust to this transition and make it as smooth as possible?"

Osborne is not the first political leader at Davos to make bearish comments as markets suffer a rocky start to 2016. The FTSE 100 has lost more than 5.8% since 31 December 2015 and has traded more than 200 points below 6,000 in January.

"Everyone here in Davos is discussing China's slowdown and plunging oil prices. 2016 has been the worst start to a year for the financial markets in my lifetime. And I'm not so young anymore," Osborne is set to joke.

Davos was expected to be dominated by talks about new technologies and international cooperation but markets and oil specifically have taken over as subject matter.

The conversation in Davos was expected to be dominated by new technologies and international cooperation but world leaders used the opportunity to talk about the market rout and low oil prices instead. Although oil prices have climbed back up past $30 (£21, €28) a barrel, their low prices are still causing stirs for oil producers as well as investors.

Trillions have been wiped off global equities since markets started plummeting from Black Monday on 24 August 2015. The vast number of restructuring measures made by big firms, especially oil companies is a sign of their lack of confidence in the oil market.

As for Osborne, it is his second message of panic in less than a month. Speaking in Davos of a "hazardous mix" of threats, he will be repeating his own statement saying that 2016 kicked off with a "dangerous cocktail of new threats". The chancellor warned of Britain's vulnerability to emerging markets in a speech to business leaders in Cardiff on 7 January.