World set to act on oil prices - PM

David Cameron has signalled that world leaders were ready to take action to tackle soaring oil prices.

Speaking after holding bilateral talks with President Barack Obama ahead of the main G8 meeting at Camp David, the Prime Minister said action was needed to protect world economies.

"We are addressing here the two biggest threats to all our economies and that is, of course, the eurozone crisis but also the very high oil prices that translate into high prices at the pumps," he said. "We are making progress on both."

Mr Cameron said the summit - which brings together the leaders of Britain, the United States, Germany, France, Italy, Japan, Canada and Russia - was an opportunity for the non-eurozone nations to press the currency bloc to resolve its problems.

"Particularly on the eurozone, what is required is a sense of urgency and then clear actions for strong banks, strong deficit reduction plans, strong governance and strong contingency plans for whatever might happen," he said.

"On all those things I think there's a good sense of talks taking place and a good sense that action needs to follow. The G8 can't instruct the eurozone what to do but why meetings like this matter is that eurozone countries can hear from countries outside the eurozone whose economies are affected.

"It's very important these messages get across but I would say there is a growing sense of urgency that action needs to be taken, contingency plans need to be put in place and the strengthening of banks, governance, firewalls, all of those things, need to take place very fast."

Mr Cameron refused to be drawn into criticising German Chancellor Angela Merkel for blocking a rescue package for the eurozone. However, he indicated that he would like to see the European Central Bank do more to stimulate demand.

"I think the German chancellor is absolutely right that every country needs to have in place strong plans for dealing with their deficits," he said. "Growth and austerity aren't alternatives. You need a deficit reduction plan in order to get growth in order to have the low interest rates that we have in Britain and are vital for the future of our economy.

"But clearly, just as Britain benefits from a strong government with a strong deficit reduction plan and strong banks but also an independent monetary policy giving us low interest rates, helping to push demand in the economy, so the eurozone, I believe, needs that approach as well."

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