IMF predicts UK will be hit hardest by recession
By politics.co.uk staff
Britain will take longer than any other major economy to recover from the recession, the International Monetary Fund (IMF) had predicted.
The conclusion, revealed in a leaked report, indicates the UK economy will still be shrinking next year, contrary to Treasury estimates which expect recovery by the end of 2009.
The fund forecasts the worst shrinkage in the UK economy since the second world war, with a 3.8 per cent contraction this year and a further 0.2 per cent next year.
George Osborne, the shadow chancellor, said: “These IMF forecasts show that Britain is set to have the longest recession of all the major economies.
“It is further evidence that Gordon Brown’s economic model is fundamentally broken and his policies on the recession aren’t working.”
The prediction comes as new unemployment figures saw two million people out of work.
It also coincided with a speech by Mervyn King, governor of the Bank of England, which warned of mass unemployment and suggested the regulatory system would have to be entirely overhauled.