Britain to suffer 'deepest slump since 1946 and worst of big EU economies' - by David Charter and Gary Duncan
Britain's economy is about to suffer its most vicious slump since 1946, shrinking by a drastic 2.8 per cent this year, Brussels warned yesterday, as fears over the scale of the recession mounted despite the new banking bailout. In a dire assessment that threatens to leave Alistair Darling red-faced at a meeting of European Union finance ministers today, Brussels predicted that the UK would suffer the worst recession of any large European economy. The European Commission's grim forecast of Britain's outlook points to a toll this year more than twice as bad as the worst-case scenario in the Chancellor's Pre-Budget projections. Mr Darling had pinned his hopes on GDP falling by no more than 1.25 per cent, although he has admitted since then that this rosy view would have to be ditched. The warning is the most authoritative yet that the economy's plight will prove far worse than the Treasury has acknowledged. It comes as a growing number of independent economists are predicting a contraction in GDP of 2.5 per cent or more this year. In a further blow to the Chancellor, the EU Commission also challenged the Government's prediction of a swift revival next year.
Note EU-Digest: This is the unfortunate result of Britain copying US style economic practices turning them into one of the worst EU economic performers.
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