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Recession not likely to reach 1980s level

Recession not likely to reach 1980s level

Category: Economy

Updated: 10/03/2009
First Published: 09/03/2009

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

The British Chambers of Commerce's March 2009 Economic Forecast paints a grim picture of the UK economy but predicts that the recession will not be as severe as it became in the 1980s.

Its prediction comes after the MPC decision to slash the base rate by a further half percentage point to an all time low of 0.5% and the Bank of England's announcement that it will create £75 billion of new funds to help kick start the struggling economy.

In its forecast, which comes just weeks before the Chancellor's Budget Report, the BCC said that UK unemployment would rise to 3.2 million - 10 per cent of the country's workforce - by the second half of 2010.

"UK prospects have worsened significantly since out last forecast in January," said chief economist at the BCC, David Kern. "We are now predicting much larger UK GDP declines. Consequently, we now expect bigger unemployment increases and larger budget deficits."

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