Britain faces the worst economic outlook since the early 1980s, according to the Financial Times’ annual survey of leading economists, which shows considerable concern that the Treasury’s forecast of a recovery in the second half of the year is too optimistic.

The survey also shows that two-thirds of economists thought the government lacked a credible policy for restoring health to the public finances. A similar proportion thought the modest tax cuts and public spending increases to be desirable.

A large majority of the 67 economists surveyed believed unemployment was likely to rise close to 3m and that house prices would continue to fall throughout 2009.

Financial Times