Britain is in recession, Brown denies IMF bailout claim

January 23rd, 2009 - 6:53 pm ICT by IANS  

Gordon BrownLondon, Jan 23 (IANS) After months of speculation, Britain was officially declared to be in state of recession Friday, but Prime Minister Gordon Brown dismissed opposition claims that his government may need to be rescued by the International Monetary Fund (IMF).The Office for National Statistics (ONS) showed the British economy shrank by 1.5 percent in the final three months of last year, following a 0.6 percent fall in the third quarter of 2008.

Figures announced Friday mark the steepest quarterly contraction since 1980.

“The sheer fall in GDP is staggering,” said Stephen Gifford, chief economist at Grant Thornton.

“Financial meltdown has probably been averted but the economy has now entered a recession which is sure to be as bad as the early 80s.”

Unemployment jumped by 131,000 in the three months to November to reach 1.92 million - the highest level since September 1997 - and is expected to hit more than three million in 2010.

Prime Minister Brown said the recession had been caused by international factors and dismissed opposition Conservative Party leader David Cameron’s claim that a bankrupt Britain may need to be bailed out by the IMF.

“I think this is ridiculous behaviour on behalf of opposition parties. The situation in Britain is this, that we have low public debt, that we have low inflation, wages are under control,” Brown said.

The last British government to seek an IMF loan - in the 1970s - was also run by the Labour Party.

The Conservatives accuse Brown of failing to save during the period of economic growth, when he was finance minister, which meant he then had to borrow heavily in order to save failing British banks after the credit crunch.

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