The UK economy is set to shrink by 4.5% in this year, the biggest fall in a single year since 1945, according to an influential think-tank.
The downbeat forecast is more pessimistic than the consensus view, and considerably worse than the 3.5% fall predicted by the government.
The Ernst & Young Item Club also warned that hopes of economic recovery are "running ahead of reality".
The Item Club also warned of the threat posed to the economy from swine flu.
If doomsday predictions about the extent of the flu outbreak materialise, it forecast a further 3% contraction in GDP this year, on top of the 4.5%.
The flu could also wipe out any growth next year, with a worst case scenario of a further 1.2% contraction.
The Item Club also predicts that UK interest rates will be kept at their current level of 0.5% well into next year.
Read more: http://news.bbc.co.uk/1/hi/business/8157876.stm
www.ukba.co.uk
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