UK To Fall Furthest Into Debt

(Press Association) – THE UK IS PREDICTED TO SINK FURTHER INTO THE RED┬áthan any other major developed country next year, an economic body has warned.

The fiscal deficit is expected to rise to 14% of economic output in 2010, compared to an average of 8.75% in the 30 most developed markets, according to a report by the Organisation for Economic Co-operation and Development (OECD).

The OECD warned that ‘public finances have deteriorated sharply’ since the beginning of the recession and called on the UK to continue to develop ‘a strong and credible’ framework for reducing the ratio of debt to output.

The OECD said the state of the UK’s balance sheet meant the possibility of extra stimulus to the economy was curtailed. It also said the UK economy was likely to recover ‘only mildly’ in 2010, with any return to health dependent on an upturn in the housing market and credit availability.

It predicted that UK unemployment, which currently stands at a 12-year high of more than 2.2 million, will ‘rise substantially’ and ‘labour market conditions will remain unfavourable for a long period.’

‘While labour market flexibility remains relatively high in the United Kingdom, policies to help the unemployed remain employable should remain a priority,’ it said.

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