The economy is expected to decline more sharply in 2009 than at any time since 1931 and is already contracting faster than in the early 1930s, according to the National Institute for Economic and Social Research.

The NIESR, issuing its quarterly economic outlook for the year, predicts that national income will decline by 4.3% this year – much more than the 3.5% forecast by Alistair Darling, the chancellor, in last month’s Budget, and even more than the 3.8% estimated by the European Commission.

The gloomier assessment – the NIESR predicted contraction of 2.7% for 2009 just a few months ago – is due to the unexpectedly sharp fall in global trade, which is hitting UK manufacturing with particular ferocity.

Financial Times