Britain will suffer its worst downturn in at least 50 years, a former Bank of England official has predicted.
The forecast comes as figures are expected to show today that the economy has shrunk for the first time in 16 years.
Danny Gabay, of City consultants Fathom, said UK recessions have become progressively worse in recent decades, both in depth and duration.
Forecast: Downturn could be the worst in at least 50 years
Mr Gabay, a respected figure who has worked for the Bank of England, said Britain has suffered seven recessions since the mid-1950s.
The average length has been nine months, but the past two, in the beginning of the 1980s and the beginning of the 1990s, both lasted for more than a year.
'It is hard for us to think that the coming one will be milder than the average of the past,' he said.
'Indeed, the coming recession will combine elements of the 1990 housing-led recession and some elements of the 1970s oil shock-led decline.
'With a great big global credit squeeze layered on top, it could very well break records.'
Adding to the gloom, former U.S. Federal Reserve chairman Alan Greenspan called the financial turmoil a 'once in a century credit tsunami'.
Gloom: Former chairman of the Federal Reserve Alan Greenspan called the turmoil a once in a century tsunami
He said the implosion of western banking giants had left him in 'a state of shocked disbelief'.
Economists expect today's figures to show the UK economy contracted by 0.2 per cent in the three-month period ended in September.
That would be the first time the economy has shrunk since the second quarter of 1992, when Conservative Prime Minister John Major was in power.
A recession is defined as two consecutive quarters of falling output.
The figures will put the final nail in the coffin for Gordon Brown's claims to have ended Britain's record of 'boom and bust'.
Worries about the figures forced sterling down to fresh lows against the dollar last night, trading at $1.60. Stocks swung wildly between gains and losses in the City and on Wall Street as the febrile mood battered markets.
Oil prices bounced back above $69 a barrel yesterday as the Arab-dominated oil cartel OPEC prepared to slash supplies to force up the price of crude.
Both the Prime Minister and Bank of England Governor Mervyn King have warned this week that a downturn is all but inevitable.
The Bank of England is under pressure to slash rates sharply to alleviate some of the pain.
But if sterling continues to fall, it could restrict Governor King's room for manoeuvre. A weaker currency drives up the cost of imports and therefore inflation, restricting scope for rate cuts.
The Bank lowered its official rate by a half point to 4.5 per cent on October 8.
Minutes from its emergency meeting on Wednesday suggested that another cut could be on the cards as soon as next month.
Yesterday the financial turmoil spread further across the world, as emerging markets suffer from the credit contagion.
Iceland, Pakistan, Hungary, Ukraine and Belarus have all been forced to ask the International Monetary Fund for loans to prop up their economies.
Traders also voiced concerns about the health of Russia's economy, which is heavily dependent on oil and gas exports.
Last night Lord Mandelson vowed that ministers would not 'wrap our heads in a blanket' and hope the global recession would go away.
The Business Secretary told private and public sector professionals at the Northern Regeneration and Renewal Summit in Manchester that Gordon Brown would lead the country through the 'storms' of the current financial climate.
A leading cancer charity is preparing to slash its budget by up to 3643million over the next five years as the credit crunch hits fundraising.
Cancer Research UK needs to make the drastic cuts following 'the dramatic decline in the economy' over the past year, according to an internal report. continues here
The forecast comes as figures are expected to show today that the economy has shrunk for the first time in 16 years.
Danny Gabay, of City consultants Fathom, said UK recessions have become progressively worse in recent decades, both in depth and duration.
Forecast: Downturn could be the worst in at least 50 years
Mr Gabay, a respected figure who has worked for the Bank of England, said Britain has suffered seven recessions since the mid-1950s.
The average length has been nine months, but the past two, in the beginning of the 1980s and the beginning of the 1990s, both lasted for more than a year.
'It is hard for us to think that the coming one will be milder than the average of the past,' he said.
'Indeed, the coming recession will combine elements of the 1990 housing-led recession and some elements of the 1970s oil shock-led decline.
'With a great big global credit squeeze layered on top, it could very well break records.'
Adding to the gloom, former U.S. Federal Reserve chairman Alan Greenspan called the financial turmoil a 'once in a century credit tsunami'.
Gloom: Former chairman of the Federal Reserve Alan Greenspan called the turmoil a once in a century tsunami
He said the implosion of western banking giants had left him in 'a state of shocked disbelief'.
Economists expect today's figures to show the UK economy contracted by 0.2 per cent in the three-month period ended in September.
That would be the first time the economy has shrunk since the second quarter of 1992, when Conservative Prime Minister John Major was in power.
A recession is defined as two consecutive quarters of falling output.
The figures will put the final nail in the coffin for Gordon Brown's claims to have ended Britain's record of 'boom and bust'.
Worries about the figures forced sterling down to fresh lows against the dollar last night, trading at $1.60. Stocks swung wildly between gains and losses in the City and on Wall Street as the febrile mood battered markets.
Oil prices bounced back above $69 a barrel yesterday as the Arab-dominated oil cartel OPEC prepared to slash supplies to force up the price of crude.
Both the Prime Minister and Bank of England Governor Mervyn King have warned this week that a downturn is all but inevitable.
The Bank of England is under pressure to slash rates sharply to alleviate some of the pain.
But if sterling continues to fall, it could restrict Governor King's room for manoeuvre. A weaker currency drives up the cost of imports and therefore inflation, restricting scope for rate cuts.
The Bank lowered its official rate by a half point to 4.5 per cent on October 8.
Minutes from its emergency meeting on Wednesday suggested that another cut could be on the cards as soon as next month.
Yesterday the financial turmoil spread further across the world, as emerging markets suffer from the credit contagion.
Iceland, Pakistan, Hungary, Ukraine and Belarus have all been forced to ask the International Monetary Fund for loans to prop up their economies.
Traders also voiced concerns about the health of Russia's economy, which is heavily dependent on oil and gas exports.
Last night Lord Mandelson vowed that ministers would not 'wrap our heads in a blanket' and hope the global recession would go away.
The Business Secretary told private and public sector professionals at the Northern Regeneration and Renewal Summit in Manchester that Gordon Brown would lead the country through the 'storms' of the current financial climate.
A leading cancer charity is preparing to slash its budget by up to 3643million over the next five years as the credit crunch hits fundraising.
Cancer Research UK needs to make the drastic cuts following 'the dramatic decline in the economy' over the past year, according to an internal report. continues here
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