Britain’s economy is set to contract this year at its sharpest rate in 60 years and will see only an insipid recovery in 2010, according to an economics think-tank.
Having shrunk 2.1% in the second half of 2008, gross domestic product is poised to contract a further 2.7% this year, the National Institute of Economic and Social Research said in its latest quarterly outlook.
Growth is predicted to return in 2010 but will be weak – just 0.6%. From the first quarter of 2008, when the economy was still growing, through to the third quarter this year – likely to be the trough – national income will fall a total of 3.6%, the NIESR predicts. The only two years in which Britain has experienced a sharper economic contraction were 1921 and 1931, according to Simon Kirby, research fellow at the institute.