http://news.bbc.co.uk/1/hi/business/8005439.stm
The economy is no longer in free fall and a recovery next spring is likely, a renowned economic think tank has said.
Stabilising markets and the easing of credit conditions may well mean that the worst of the recession is over, the Ernst & Young Item Club said.
It is forecasting the economy to shrink by 3.5% this year and by 0.1% in 2010.
However, it also said that the backdrop to Wednesday's Budget is "bleak" and warned that the chancellor has "limited options" in his spending plans.
In the Budget, Alistair Darling is expected to predict economic contraction of about 3% of GDP this year - up from his earlier forecast in November of between 0.75% to 1.25%.
The Item Club believes that the revival of the bond market in January has enabled the UK's strongest companies to gain access to credit.
It said its forecast was also encouraged by improved sentiment emerging in business surveys in the US, China and the UK.
Job losses
However, Peter Spencer, chief economic adviser to the Item Club, warned that the UK was not out of the woods yet.
"We face another 12 to 18 months of serious grief. Around 900,000 jobs will be lost this year and half a million next," he said.
He also predicted a gloomy next 12 months for the housing market and the high street.
World trade is expected to decline by 9% in 2009, he added.
Meanwhile, the British Chambers of Commerce has called for the chancellor to provide more support for private industry in the Budget.
The business group wants a freeze on the minimum wage and a cut in small businesses' corporation tax.
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BOOMED!
The economy is no longer in free fall and a recovery next spring is likely, a renowned economic think tank has said.
Stabilising markets and the easing of credit conditions may well mean that the worst of the recession is over, the Ernst & Young Item Club said.
It is forecasting the economy to shrink by 3.5% this year and by 0.1% in 2010.
However, it also said that the backdrop to Wednesday's Budget is "bleak" and warned that the chancellor has "limited options" in his spending plans.
In the Budget, Alistair Darling is expected to predict economic contraction of about 3% of GDP this year - up from his earlier forecast in November of between 0.75% to 1.25%.
The Item Club believes that the revival of the bond market in January has enabled the UK's strongest companies to gain access to credit.
It said its forecast was also encouraged by improved sentiment emerging in business surveys in the US, China and the UK.
Job losses
However, Peter Spencer, chief economic adviser to the Item Club, warned that the UK was not out of the woods yet.
"We face another 12 to 18 months of serious grief. Around 900,000 jobs will be lost this year and half a million next," he said.
He also predicted a gloomy next 12 months for the housing market and the high street.
World trade is expected to decline by 9% in 2009, he added.
Meanwhile, the British Chambers of Commerce has called for the chancellor to provide more support for private industry in the Budget.
The business group wants a freeze on the minimum wage and a cut in small businesses' corporation tax.
==============================
BOOMED!
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