OECD: UK will take longest to recover from recession
The UK is in a "sharp recession" and can expect no growth in 2010 according to OECD
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Wednesday, 24, Jun 2009 02:32
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The world economy is set to rally from the worst recession in post-war history, but UK growth will flatline in 2010 according to an influential think-tank.
The Organisation for Economic Cooperation and Development (OECD) said the deepest slump for six decades is finally drawing to a close as emergency policy measures and recovering financial markets boost growth prospects.
But it had less good news for Britain, which it said was in a "sharp recession" and could expect no growth in 2010.
The think-tank revised down its growth estimate for the UK this year to -4.3 per cent, the biggest one-year fall in output since 1945 and substantially lower than Alistair Darling's budget forecast of -3.5 per cent.
Commenting on the OECD report, Liberal Democrat Treasury spokesman, Vince Cable said "What is particularly worrying is that the government seems to have no coherent plan to get the British economy back on course and the budget back into balance."
While a devalued pound was helping to mitigate the downturn, unemployment is predicted to rise in the UK to as much as 10 per cent by next year.
The OECD also warned that Britain's budget deficit would hit 14 per cent of GDP next year - the biggest of any of the 30 member countries.
It cautioned that public sector deficits will need to be inhibited as recovery takes hold, and urged the government to develop a "concrete and comprehensive plan" for the future.
The Liberal Democrats have called for all parties to have an "an honest and open debate about what the government can and can't afford to do".
The global outlook as a whole was rosier, following better-than-expected performance by the United States and the bigger developing countries.
Angel Gurría, the OECD's secretary general, said "Thanks to firm action to stimulate our economies it appears that we have escaped the worst during this crisis."