‘Economic horror’ alert

Jul 21 2008 by Felicity Stewart, Evening Gazette

THE UK is heading for an economic “horror movie” and will struggle to avoid recession next year, an influential think tank claimed today.

Ernst and Young’s ITEM Club is forecasting GDP growth of 1% next year, inflation to remain above the Government’s target for the next 12 months and a “substantial” increase in unemployment.

The group also predicts consumer spending will nearly slow to a standstill in 2009, rising by just 0.2% as households wrestle with rising inflation, lower credit availability and a tough housing market.

ITEM’s chief economist Peter Spencer said: “Both on the high street and in the housing market it is going to get a great deal worse before it gets better.”