Blow to Brown as IMF says Britain to be worst-hitJanuary 29th, 2009 - 5:32 pm ICT by IANS
London, Jan 29 (IANS) In a further blow to Prime Minister Gordon Brown, the International Monetary Fund (IMF) has warned that the global economic downturn will hit Britain harder than any other rich country.The Washington-based financial institution forecast Wednesday that the British economy would shrink by 2.8 percent this year, twice as much as previously predicted.
The IMF outlook, which says the recession in Britain will be deeper than that in the US, Italy, France and other developed countries, contradicts Brown’s assessment that Britain is better placed than other rich nations to deal with the downturn.
The IMF said the US will fall by 1.6 percent, France by 1.9 percent and Germany by 2.5 percent. The average drop among advanced economies will be 2 percent.
However, it said the British economy would grow by 0.2 percent next year.
The news comes as a further blow to the image of Gordon Brown, whose ratings in opinion polls this week fell despite him staking his reputation on his abilities as a financial manager.
A Guardian/ICM polls carried out after a second round of multi-billion pound bank bail-outs, showed only 31 percent of voters think that Brown’s high-profile battle to turn around the economy will work.
As many as 64 percent thought his moves will either achieve nothing or even make the situation worse.
Brown has sought to blame the recession on international factors but the opposition Conservative Party accuses him of mismanaging the British economy during a period of growth after the last Conservative government when Brown became Tony Blair’s finance minister.
Conservative leader David Cameron told parliament Wednesday that in the last three months alone, 4,000 British businesses had gone bust, over 11,000 homes repossessed and almost 250,000 people had lost their jobs.
Brown responded: “This is a recession facing every country and continent in the world. Everybody except the Conservative Party agrees it is not a unique UK phenomenon. This is something that has got to be dealt with internationally.”
But in another bleak assessment, the Institute for Fiscal Studies said that Britain would be saddled with government debt for more than 20 years, regardless of which party wins the next election, due by the summer of 2010.
Tags: british businesses, british economy, conservative government, conservative leader, conservative party, david cameron, economic downturn, finance minister, financial institution, gordon brown, international factors, international monetary fund, international monetary fund imf, italy france, london jan, opinion polls, other developed countries, prime minister gordon brown, recession, tony blair