Independent UK: Recession next year: forecaster says things can only get worse

[marmar]

Recession next year: forecaster says things can only get worse

By Margareta Pagano
Sunday, 20 July 2008


The UK economy is heading for recession next year and unemployment could top two million by 2010. That's the gloomy prognosis from the Ernst & Young Item Club, which publishes its summer forecast tomorrow.

Peter Spencer, Ernst & Young's chief economist, said: "Both on the high street and in the housing market, it will get a great deal worse before it gets better."

He added that the economy will struggle to avoid recession next year, with predicted GDP growth of only 1 per cent. "Our worry is that without the usual medication from the Bank of England, consumers will move from their current state of denial into a state of despair."

Ernst & Young's dismal forecast comes after Sir John Gieve, deputy governor of the Bank of England, warned that inflation is set to climb well over 4 per cent this year. He also admitted that a recession looks likely.

In a severe blow to Gordon Brown, the Treasury has been forced to admit it is working on plans to reform its fiscal rules on spending and debt as the Government will break its own rule limiting net public-sector debt to 40 per cent of national income. .....(more)

The complete piece is at: http://www.independent.co.uk/news/business/news/.htmlssion-next-year-forecaster-says-things-can-only-get-worse-872149.html

[villager]

1. Brixton riots: Not just nostalgia anymore...

n/t

[Demeter]

2. Such Refreshingly Open Honesty!

[DavidDvorkin]

3. When is the latest for an election in the UK?

A Conservative government looks ever more likely, ugh.