Slight economic growth in 2010 predicted - Economy - News - Moneyfacts

News

Slight economic growth in 2010 predicted

Slight economic growth in 2010 predicted

Category: Economy

Updated: 04/08/2009
First Published: 20/07/2009

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 It is now over 6 months old so the content may be out of date.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 UK economy is set to contract by 4.5 per cent this year, before recording a slight rise in 2010, a financial report has said.

The Ernst & Young ITEM Club also predicted that 'base rates will be pinned to the floor over the next 18 months, undermining a recovery in sterling.'

While a stabilisation of the UK economy was acknowledged, hopes of a substantial recovery are now running ahead of reality.

"Although GDP fell by 1.8 per cent in the final quarter of last year and a staggering 2.4 per cent in the first quarter, there have been encouraging signs recently," it said.

"The ITEM Club's view is that the economy has now been stabilised but remains critical and on life support. It remains unclear how quick and complete the recovery will be and there is still the chance for a serious relapse."

The 4.5 per cent yearly fall would represent the steepest annual fall in the UK economy since the end of the Second World War.

While there are hopes that the worst of the economic downturn is over, the Ernst & Young ITEM Club warned that a swine flu pandemic could be disastrous for the economy, potentially reducing GDP by a further three per cent this year and an additional 1.7 per cent in 2010.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

Related Articles

Base rate remains unchanged in surprise decision

Earlier today, the Bank of England’s rate setting committee announced that it had voted decisively to keep base rate on hold at its record low of 0.5%. But what does it mean for you?

Budget 2016 – an overview

Well, George Osborne has just revealed the Budget for 2016 – his eighth so far as Chancellor – and as ever, there were some winners and losers from the whole thing. Below is a quick overview of the key points.

What does a US Fed rise mean for the UK?

The US Federal Reserve has decided to raise interest rates, and although you may not think that financial events happening in the US will have much of an impact on UK soil, you may be surprised…
 
Close