UK Economy Could Shrink By As Much As 1.5%

The Associated Press reports that Britain’s economy will shrink by 1.5% next year and unemployment could reach 2.5 million in 2010, up from the current 1.8 million, a leading London think tank is predicting.

The National Institute of Social and Economic Research said that Britain’s Treasury could curb the downturn through increased spending. It forecast that a 30 billion pound ($45 billion) government package of tax cuts and higher government spending would improve growth by 1%, making the overall economic contraction in 2009 just 0.5%. ❖