Darling: The recession is worse than we expected
The Treasury was wrong in its predictions of the severity of the recession, chancellor Alistair Darling has admitted.
“It’s worse than we thought,” he told the Sunday Times newspaper in an interview ahead of the Budget announcement on April 22nd.
The chancellor is expected to predict a 3 per cent shrinking of the UK economy in this month’s budget, the worse single annual performance since World War II.
His comments over the severity of economic decline are the first time he has publicly admitted government estimates were incorrect.
“I thought we would see growth in the second part of the year,” Mr Darling told the Sunday Times.
“I think it will be the back end, turn of the year time, before we start seeing growth here.”
Prime minister Gordon Brown and US president Barack Obama hailed the stimulus package agreed at the G20 summit as a turning point for the global economy but Mr Darling’s comments are likely to foreshadow a downcast Budget later this month.
Asked if the worst of the recession was over for the UK, he replied: “I think there is some way to go yet. A lot really depends on actually how much other countries do.”
The International Monetary Fund (IMF) predicted the British economy will shrink by 3.8 per cent this year while unemployment passed the two million mark in March, its highest since 1997.
