Darling growth forecasts scorned by EC
Tuesday 5th May 2009, 11:25AM BST.
Alistair Darling’s forecast that the UK economy will grow by 1.25 per cent next year is overly optimistic, the European Commission says.
The EC accepts the British economy will return to growth in 2010, but only at a rate of 0.1 per cent after shrinking 3.8 per cent this year.
The commission also predicts unemployment rates will continue to rise to 8.2 per cent in 2009 and further to 9.4 per cent in the following year.
And public debt is expected to be higher than the chancellor had predicted, up to 12 per cent this year and 15.6 per cent in 2010.
“Having grown at an average annual rate of close to three per cent during the preceding decade due to buoyant domestic demand, the UK economy is now clearly experiencing one of its worst recessions in recent history, in the context of the global financial and economic crisis,” the commission said in its report.
Commenting, Howard Archer from Global Insight said: “The European Commission’s forecasts will make pretty unpleasant reading for the government, as they are significantly worse than those contained in Mr Darling’s recent budget.”
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