Chances of full-blown UK recession risk rising

A full-blown recession on these shores is now a 35pc probability as the credit crunch engulfs Britain’s housing market and broader economy, warns an authoritative report.

Edmund Conway, Economics Editor, The Telegraph - 28 March 2008

The Bank of England may be forced copy the Federal Reserve’s lead and make dramatic interest rate cuts as Britain falls victim to a US-style slump, say experts at Lehman Brothers.

The Bank of England cut its own forecast for growth this year and next, and refused to rule out the possibility of a recession

Downward Spiral, a lengthy report on the UK economy by the investment bank, said the prospects look particularly bleak for the next two years - and perhaps beyond. It also cautions that house prices will fall by 8pc over the next two years.

The warning, which coincides with signs the credit crunch in the financial markets is having a marked impact on families’ finances, is the most bearish yet from a major UK forecaster - full article