The nation's output will drop by around three percent this year - two major forecasts have suggested.
The UK is in an "unhealthier position" than other European nations to deal with the financial crisis, a leading economist said today.
Jonathan Loynes, chief European economist at Capital Economics, suggested that high levels of both consumer and government debt gave the government less leeway to spend its way out of recession than was possible in other countries. He added that he was expecting a three percent contraction in the UK economy for 2009.
This chimes closely with the prediction of the International Monetary Fund (IMF), which suggested last week that output would fall by 2.8 percent in Britain this year. Overall, the organisation said that global growth would drop to a near-unprecedented 0.5 percent - testifying to the worldwide nature of the present financial crisis.
Mr Loynes said: "[The IMF's prediction] is the same with our own forecasts … the UK is certainly one of the worst [performing economies]."
He added: "It has entered this downturn with bigger economic imbalances if you like than other economies - high levels of debt, an over-large housing market, a large current account deficit and a big fiscal deficit which is obviously limiting the scope for the policy makers' recent fiscal policy in response to the downturn."
Output figures from the Office for National Statistics show a 1.5 per cent decline for the UK in the fourth quarter of 2008. This follows a decrease of 0.6 per cent for the third quarter.
