Chances of Recession 'Becoming Higher'

Economists believe that a recession is becoming more and more likely in the UK, according to a poll released today.

News agency Reuters has questioned 70 experts over the past week, finding that the average growth forecast for national GDP predicted by the group stood at just 1.5 percent for 2008. This is 0.2 percent down on their previous prediction last month.

Moreover, the 2009 forecast has also been reduced by the group, from 1.5 percent to just one percent. This makes the possibility of negative economic growth, or recession, higher than before - especially when the UK's three percent growth rate for 2007 is taken into account.

"The UK economy is clearly heading for at least a sharp slowdown with about a one in three chance that this could turn into an outright recession," a PricewaterhouseCoopers economist polled by Reuters commented.

Volatility on the stockmarkets and a tapering of consumer activity, along with big drops in the number of secured and unsecured loans offered by lenders, are all features of the ongoing credit crunch - which has beset the global economy for the past year.

Recession is commonly defined as two consecutive three-month periods, or quarters, of negative GDP growth.