UK to go into recession, says EC
10 September 2008 The UK economy will enter a technical recession in the second half of the year as a result of the credit crunch and a decline in the housing market, the European Commission (EC) has forecast. Germany and Spain will join the UK in recession, while France and Italy will escape but only with zero growth economies, the EC predicted in its half-year assessment of the eurozone. A technical recession is defined as two successive quarters of negative growth. Britain’s economy was forecast to expand by just 1.1 per cent over the whole of 2008, barely a third of the rate of growth enjoyed in 2007. The eurozone economy in its entirety would avoid recession, but growth would decline to just 1.3 per cent. The EC report said: “The main downside risks identified in the spring forecast have materialised, with the financial turmoil deepening, commodity prices soaring and the shocks to several housing markets spreading more widely.”
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