UK ‘faces a 50-50 risk of suffering triple-dip recession’
return – leading to decades of stagnation and further decline,’ he will add.
City economists are predicting growth of only 1.1 per cent in 2013 and 1.7 per cent in 2014, followed by 2 per cent in 2015 and 2.1 per cent in 2016.
That is far weaker than expected by the Treasury and will leave George Osborne struggling to cut government borrowing and get the ballooning national debt under control.
The Office for Budget Responsibility, the government’s official forecaster, last month predicted growth of 1.2 per cent in 2013 and 2 per cent in 2014, followed by 2.3 per cent in 2015 and 2.7 per cent in 2016.
Erik Britton, of financial research group Fathom Consulting, said the forecasts were too optimistic.
‘The outlook for growth is very weak. Bumping along the bottom is the order of the day, and double, triple, quadruple, and n-tuple dips are the likely corollary,’ he added.
Such an outcome would wreak havoc with the Chancellor’s plans to cut borrowing, having inherited a record deficit of £159billion from Labour.
Borrowing fell to £142billion in the Coalition’s first year in power and again to £121billion last year but the decline has not been as fast as Mr Osborne predicted.
He now hopes to cut the annual deficit to £31billion by 2017-18 – but this will require yet more austerity and could prove optimistic if the recovery does not live up to the Treasury’s expectations.
The CEBR warns that the deficit will be around £75billion in 2017-18 and the Chancellor will borrow almost £100billion more than expected between now and then – pushing the national debt to ever more dangerous levels. THERE is a 50:50 chance that Britain will slide into a devastating triple-dip recession this year, leading economists warn today.
Output ‘probably’ fell in the final three months of 2012 and could do so again in the first three months of 2013, said the Centre for Economics and Business Research.
Another two quarters of decline in a row would mean the third recession in five years and set the scene for another bleak year.
The think-tank singled out the crisis in the eurozone as ‘a major challenge for the UK economy’, given it is Britain’s biggest trading partner.
A weak recovery in Britain would blow a gaping hole in its creaking finances and cost the country its coveted AAA credit rating.
Business leaders will today call for ‘bold moves’ from ministers to unleash growth in 2013 – including investment in infrastructure and an assault on red tape.
John Longworth, of the British Chambers of Commerce, will say the Government risks doing ‘too little too late’ to bolster the economy and get young people into work.
‘We need a clear, agreed and long-term push to improve Britain’s business environment before we reach a point of no