Britain will be hit harder by recession than any other major EU economy, the European Commission has warned.
It predicts the UK economy will shrink by 1 per cent next year and will grow by a mere 0.4 per cent in 2010.
Unemployment will grow by 25 per cent to more than 2.2 million next year. Meanwhile, incomes will stagnate and house prices continue to tumble.
Only Estonia and Latvia are expected to suffer more profound recessions in 2009.
Earlier this year Chancellor Alistair Darling had predicted the UK will grow by as much as 2.75 per cent in 2009 and three per cent in the following year. But he and Gordon Brown last month admitted the picture had changed due to the bank failures.
With the credit crunch hitting tax revenues, forcing the Government to increase public borrowing, the EU forecasts suggest that the deficit could hit £80 billion next year and £94 billion in 2010 - more than double the Treasury forecasts given in March.
The Commission is, however forecasting a gradual recovery in the Eurozone in the second half of next year - but admits that this is unlikely in Britain until 2010.
It said: 'The central outlook envisages a marked fall in private consumption in 2009 and 2010, driven by more restrictive borrowing conditions and lower household wealth.' continues here
It predicts the UK economy will shrink by 1 per cent next year and will grow by a mere 0.4 per cent in 2010.
Unemployment will grow by 25 per cent to more than 2.2 million next year. Meanwhile, incomes will stagnate and house prices continue to tumble.
Only Estonia and Latvia are expected to suffer more profound recessions in 2009.
Earlier this year Chancellor Alistair Darling had predicted the UK will grow by as much as 2.75 per cent in 2009 and three per cent in the following year. But he and Gordon Brown last month admitted the picture had changed due to the bank failures.
With the credit crunch hitting tax revenues, forcing the Government to increase public borrowing, the EU forecasts suggest that the deficit could hit £80 billion next year and £94 billion in 2010 - more than double the Treasury forecasts given in March.
The Commission is, however forecasting a gradual recovery in the Eurozone in the second half of next year - but admits that this is unlikely in Britain until 2010.
It said: 'The central outlook envisages a marked fall in private consumption in 2009 and 2010, driven by more restrictive borrowing conditions and lower household wealth.' continues here
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