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Recession will hit UK hardest, says EC


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Recession will hit UK hardest, says EC

Economists predict slowdown will be sharper in Britain than in any other major European country.

* David Gow in Brussels

* guardian.co.uk,

* Monday November 03 2008 12.34 GMT

Britain will suffer a deeper recession than any other mature EU economy, with a contraction of 1% next year and only 0.4% growth in 2010, the European commission said today.

The EC's latest half-yearly forecast predicts UK unemployment will rise from 5.3% in 2007 to 7.1% in 2009 — which would bring the number out of work to about 2.25 million.

It expects the budget deficit to jump to 5.6% next year, which would be around £80bn, and 6.5%, or £94bn, in 2010. Government debt is forecast to rise by more than 15 percentage points to more than 60% of GDP in 2010-11. The figures would break stability and growth limits set by the EU's stability and growth pact.

The bleak EU forecasts blow a hole in the government's assertion it has been running the EU's model economy for the past decade.

Britain's contraction will be worse even that that of Ireland, which is forecast to shrink 0.9% in 2009 but recover to 2.4% growth in 2010. Ireland's budget deficit is forecast to be higher, at 6.8% of GDP in 2009 and 7.2% in 2010.

Only Estonia and Latvia are expected to suffer deeper recessions in 2009, contracting 1.2% and 2.7% respectively. Germany, France and Italy, the eurozone's three biggest economies, are expected to stagnate.

Presenting his "dark" forecast, Joaquín Almunia, economic and monetary affairs commissioner, said it was highly uncertain and volatile given the fragile state of global financial markets.

He indicated tension had eased in inter-bank lending after the co-ordinated stabilisation plans adopted by governments in recent weeks.

But he insisted the EC would stick to its revised stability and growth pact, with the UK expected to receive a warning early in the new year. The UK is already in the so-called excessive deficit procedure but cannot be sanctioned as it is not part of the eurozone.

Senior EC economists said: "The central outlook (for Britain) envisages a marked fall in private consumption in 2009 and 2010, driven by more restrictive borrowing conditions and lower household wealth."

Presenting a bleak picture of falling housing prices, falling living standards and rising joblessness, they said: "The heightened unemployment risk is also likely to prompt increases in savings from their currently very low level."

Full story, source: The Guardian

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oh boy the english people will be hit hard but immigrants will still be able to afford all the luxuries the government can hand out

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Unfortuneately chemical licker, that seems to be the truth, labour should hang their heads in shame. :td:

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Really? I'm now sceptical. I know a little while ago I was anticipating the collapse of capitalism, but i think now that's probably unlikely to happen, and so it'll be the usual swings and roundabouts, as it always is. They'll patch it up, and it'll limp along until the next "crisis", and then the politicians will patch it up once again, and so on. The whole thing needs to have a radical overhaul, certainly, but that's not going to happen overnight, and the apocalypse rarely does actually happen, i've found.

Edited by 747400
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the EU block is in recession. and lets face it were all in recession, the EU countries are just hoping it hits Britain worse. so they can hold aloft the EU currency and pass it off to the people that somehow the Euro has better placed them weather the storm. which is a load of tosh.

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the EU block is in recession. and lets face it were all in recession, the EU countries are just hoping it hits Britain worse. so they can hold aloft the EU currency and pass it off to the people that somehow the Euro has better placed them weather the storm. which is a load of tosh.

From what I hear the Euro's on the up and the oil companies are even thinking using the Euro instead of the dollar for trading oil, I used to be anti-Euro but in the current climate and the Pound losing strength, I'm starting to warm to it.

Edited by Splodgenessabounds
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From what I hear the Euro's on the up and the oil companies are even thinking using the Euro instead of the dollar for trading oil, I used to be anti-Euro but in the current climate and the Pound losing strength, I'm starting to warm to it.

Well, it is not like Britain just can go waltzing in and claim they want the Euro. There are requirements, and the first is fiscal discipline (which all think is the reason the government never got into it).

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From what I hear the Euro's on the up and the oil companies are even thinking using the Euro instead of the dollar for trading oil, I used to be anti-Euro but in the current climate and the Pound losing strength, I'm starting to warm to it.

that's the whole point of this news piece. they want people to warm to the idea of the Euro. The United Kingdom is the last Great Bastion in Europe and never forget that. who wants to be part of a Union which is full of capitulating nations all huddling together, selling their people down the river to achieve their political aims in some desperate attempt to be some sort of power on the world stage.

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From what I hear the Euro's on the up and the oil companies are even thinking using the Euro instead of the dollar for trading oil, I used to be anti-Euro but in the current climate and the Pound losing strength, I'm starting to warm to it.

:lol: how easy is it to manipulate people. thats what the powers want and we are running straight into their arms of saviour :yes:

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i think there's a lot to be said for not being a power on the world stage, myself. It tends to lead to getting involved in adventures that usually end in tears.

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Trust the EU... lol

yeah I think we all know with country is propping up Europe...

Here's a clue... it ain't Spain....

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From what I hear the Euro's on the up and the oil companies are even thinking using the Euro instead of the dollar for trading oil, I used to be anti-Euro but in the current climate and the Pound losing strength, I'm starting to warm to it.

This is exactly what THEY want, its all part of the push in creating an ORWELLIAN state :no: Im not falling for it pal

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This is exactly what THEY want, its all part of the push in creating an ORWELLIAN state :no: Im not falling for it pal

:o GOOD LORD!!!! Whatever will we do?

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:o GOOD LORD!!!! Whatever will we do?

Keep the pound!!! i dont want euro nonsense. i like our currency-its what makes us british. Euros are like monopoly money!

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