Lord Mandelson, the Business Secretary, has attacked the chairman and chief executive of Starbucks, the American coffee giant, in a foul-mouthed tirade for talking down the British economy.

Howard Schultz, who built the coffee chain which is now struggling in America, said in a television interview last night: “The concern for us is Western Europe and specifically the UK. The UK is in a spiral.”

Lord Mandelson later said, within earshot of journalists: “Why should I have that guy running down the country? Who the **** is he?”.

The Business Secretary hinted that Mr Schultz was deflecting attention away from Starbucks’ domestic travails. The Starbucks juggernaut went into reverse for the first time last year and in January it announced that it was to close another 1,000 poorly-performing stores.

He said: "How the hell are they doing?”.

Lord Mandelson later gave a slightly more carefully worded interview to CNBC, which a Department for Business, Enterprise and Regulatory Reform spokeswoman said "sounded much more like him".

He said: “The UK is not spiralling, although I have noticed that Starbucks is in a great deal of trouble. But that may be because of their over-exposure given the state of the market. So please do not project Starbucks on to the UK economy as a whole.”

Mr Schultz’s comments contrast sharply with Darcy Willson-Rymer, who manages Starbucks’ British operations.

He insisted yesterday Starbucks had performed strongly in Britain as the company unleashed a new attempt to boost sales by launching its own brand of instant coffee.

But Mr Schultz had earlier hinted at difficulties in the UK. Late last year, he told The Times that Starbucks would be “extremely careful” in opening new stores in Britain in a reaction to “cataclysmic” economic events.

A Starbucks spokesman said: "The reality of the global economy is that no country is immune to the difficulties. We are all in this together and as a global business we are committed to each and every market we serve."

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