Sharp economic slowdown forecast for UK

News Article - 25 April 2008
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Britain's economy is likely to face a "rough ride" over the next two years, a new report claims.

According to Ernst & Young's Item Club, the UK economy will witness a "rapid, painful adjustment" between now and 2010, with GDP growth falling from 3.1 per cent in 2007 to 1.8 per cent this year alone.

The economic forecasting group predicts that economic growth will moderate, as the full effects of the global credit crunch are experienced, with growth dropping to 1.5 per cent in 2009 unless the government takes decisive action to prevent it.

Peter Spencer, Ernst & Young economic adviser, said: "With no solution for the credit market crisis in sight, the UK is in line for two years of sub-trend growth. Consumption growth will now throttle back in response to the fall in house prices, while export growth will perk up in response to the fall in sterling."

Chancellor Alistair Darling announced this week that he is providing a £50 billion rescue package for the banking industry in a bid to prevent a sharp economic downturn.

Effective accounting software is more important than ever during a period of economic slowdown, allowing companies to effectively and accurately monitor their operations.

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