2009 economy will be dreadful, warns Ken Clarke
The British economy is likely to endure a “dreadful” 2009, according to shadow business secretary.
Mr Clarke, who returned to the Conservatives front bench last week, was being interviewed on BBC One’s Andrew Marr Show.
During the interview, he said the bailout packages for the banking system had failed to achieve their objectives, adding that the public was losing confidence in the prime minister.
He said: “We realised some money had to go in but the money has been pumped in ineffectually and it hasn’t worked.
“So far the crisis is deepening and we haven’t achieved the one key objective to get the banking system working normally again.”
However, the former chancellor said that while he was worried about the fall in sterling’s value in relation to other currencies, he did not think it was likely that the British government would have to seek help from the International Monetary Fund to shore up the economy.
Liberal Democrats leader Nick Clegg said the structure of the UK economy would be radically different in the future as past growth was driven by “subservience” to financial markets.
Speaking on the same programme, he said: “The future is going to look dramatically different than the past in terms of how we run our economy.”
Official figures released last week showed that the UK’s GDP had fallen by 1.5 per cent in the last quarter of 2008 after a fall of 0.6 per cent in the preceeding three months.
The two consecutive quarters of negative growth meant that the UK had entered recession for the first time since 1991.