UK Daily Mail
Tuesday, Sept 3, 2008
Britain is forecast to be the only major economy that falls into recession this year as a crumbling housing market takes its toll, heaping further embarrassment on Chancellor Alistair Darling.
Marking out the UK as the sick man of the G7 group of leading economies, the respected Organisation for Economic Co-operation and Development has downgraded the UK to bottom of the pile behind the U.S., Germany, France and Japan.
While Mr Darling backtracked on his comments that this country faces the worst downturn in 60 years, the OECD painted a grim picture in the short term, with forecasts that the economy will shrink for the rest of the year.
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It expects UK economic growth to fall by 0.3 per cent this quarter and 0.4 per cent for the last quarter of the year.
This would officially plunge the economy into recession, which happens after two consecutive periods of falling growth.
The OECD said the housing market plays such a key role in the UK’s economic prosperity that any downturn in property will have a major knock-on effect for the economy. Last month the Nationwide building society recorded a 10.5 per cent fall in house prices for the year.
This article was posted: Wednesday, September 3, 2008 at 3:57 am