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Uk Double Dip Fears Rise As Forecasters Predict Slow Recovery

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The chances of Britain dropping back into recession this year have doubled to one-in-five, a leading economic forecaster has warned amid mounting fears that the recovery will be slower than hoped.

The Centre for Economics & Business Research (CEBR) has estimated that growth this year will slide back to just 1.1pc, compared with the official forecast of 2.1pc. "The chances of a double dip for the UK economy have risen from 10pc in October to 20pc now," the CEBR said.

The Coalition was dealt a second blow by the National Institute for Economic & Social Research (NIESR), which estimated that growth last year was just 1.6pc, against the official 1.8pc forecast. It added that the economy is not expected to recover to pre-recession levels until 2012.

Between them, the two economic think-tanks are predicting a far slower pace of expansion than the Treasury, potentially imperilling both the Government's deficit reduction programme and vital growth in private sector jobs.

"The VAT rise, which was planned before the harvest failures that have boosted food and cotton prices – affecting the price of clothing – will help keep inflation up in 2011 while adding to the squeeze in disposable income and reducing GDP growth," CEBR said. The increase in VAT from 17.5pc to 20pc is estimated to have added about 1.2pc to inflation this year.

Douglas McWilliams, CEBR chief executive, added: "It is a tough background for achieving the reductions in public spending that are absolutely necessary to reduce the deficit." The CEBR is forecasting 1.8pc growth for last year, 1.5pc for next year, and 2pc for 2013. Moody's, the credit rating agency, reaffirmed the UK's AAA-rating and praised the "ambitious fiscal adjustment programme".

Totally shocking unexpected news.....

So for months we've been drip fed their really wasn't much risk now all of a sudden the risk has got bigger. It's almost like these people making the predictions are clueless.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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