The next 12 months will see the largest contraction in the UK economy since 1946, according to a report from the Ernst & Young Item Club. GDP is expected to shrink by 2.7 per cent this year, with a further contraction of 0.5 per cent in 2010. The report also predicts that unemployment will exceed 3.25 million by the end of next year.
But it also argues that government action since September 2008 has been “constructive and helpful. Without it, the situation that the UK economy is now facing would have been far worse. Gordon Brown and Alistair Darling have to think boldly and creatively and then, with a fair wind, the UK economy will emerge from this recession rebalanced and ultimately more robust.”