By Svenja O’Donnell
Feb. 4 (Bloomberg) -- The British economy will shrink until the fourth quarter of this year as the world endures the slowest growth since the end of World War II, the National Institute of Economic and Social Research said.
Gross domestic product will fall 2.7 percent in 2009, compared with a previous forecast of a 0.9 percent contraction, Niesr, whose clients include the Treasury and the Bank of England, said in a report today. It predicts the global economy will expand 0.5 percent, the slowest pace in 60 years.
Consumer confidence dropped to the lowest level in at least four years last month as job losses stoked pessimism about the economy, Nationwide Building Society says. The central bank may cut the benchmark interest rateto a record low of 1 percent tomorrow as policy makers try to unblock credit markets and fight the recession.
“The U.K. economy has itself entered a rather severe recession,” said Simon Kirby, an economist at Niesr. “Household consumption expenditure will be a major contributor to the contraction.”
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