OECD warns of severe recession for the UK

| November 25, 2008 | 0 Comments

The Organisation for Economic Co-operation and Development (OECD) is warning that the UK will face a severe economic downturn next year.

The organisation, which is based in Paris, is forecasting that economic output in the UK will fall more than any other developed country.

Economic output is predicted to decline by 1.1% in the UK next year, while the US economy is forecast to fall by 0.9% and Germany is predicted to fall by 0.8%.

The Japanese economy, which entered a recession in the second quarter of this year, is only expected to shrink by 0.1% in 2009.

As well as the UK, Hungary, Iceland, Ireland, Luxembourg, Spain and Turkey are also expected to be hit badly by the economic slump, said the organisation.

According to the OECD, these countries are most directly affected by the financial crisis, which in some cases exposed other vulnerabilities, or by severe housing downturns.

In the Pre-Budget Report yesterday, Chancellor Alistair Darling acknowledged that the UK economy would fall by 0.75% to 1.25% in 2009, but said that the UK was in a good position to survive the economic downturn.

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