|    FM Home   |    FM News   |    FM Forum   |    FM Blog   |   
Wednesday 22nd of October 2008
October 19, 2008

Ernst & Young: Britain in recession


by Kay Murchie
”Ernst

A forecast published today by the Ernst & Young Item Club claims that Britain is now in a recession that will last for 12 months, with only a weak recovery in 2010.

Peter Spencer, the chief economist at Ernst & Young, said the economy fell sharply in the previous quarter and will shrink for three more quarters before bottoming out in the latter half of 2009.

Meanwhile, Gross Domestic Product (GDP) will drop by 1% next year (the first negative growth for 16 years) and will grow by just 1% in 2010, added Mr Spencer.

Action taken to stem the banking crisis meant that stock markets across the world recovered but shares plummeted worldwide late last week amid fears of a global recession.

Meanwhile, the British Chambers of Commerce, said it is pretty dismal and there is going to be a recession.

Britain has been on the brink of recession since the end of June, when the economy came to a standstill with official growth at zero.

As the Government struggles to avoid a recession, economist Roger Bootle, believes that interest rates in the UK could fall below the 2% mark, the lowest figure since the Bank of England was established in 1694.

Mr Bootle predicts a fall to 3.5% by the end of the year and 2.5% or 2% by spring and lower if the situation deteriorates.

Earlier this month, the Bank of England, along with six other central banks cut interest rates by 0.5%. Mr Bootle believes that there will be a further rate cut in November.

Mr Bootle adds that inflation will plunge next year and might even hit the zero mark or below.

Official figures last week revealed that UK inflation hit 5.2% in September, the highest level since March 1992, and more than twice the Government’s target of 2%.

Discuss this in the Finance Markets forums

Story link: Ernst & Young: Britain in recession


Add to Bookmarks:

ADD TO DEL.ICIO.US     ADD TO DIGG     ADD TO FURL

ADD TO STUMBLEUPON     ADD TO YAHOO MYWEB     ADD TO GOOGLE     ADD TO SPURL

 

 

Previous: « UK Coal drops almost 34 percent on output decline
Next: Public borrowing at highest since 1946 »

Visited 553 times, 11 so far today