The European commission has today announced that they believe the UK, Spain and Germany will all fall into recession in 2008. Brussels said that the three countries would see two negative quarters in a row and that is what is technically defined as a recession.
In the latest economic forecast the commission also downgraded its outlook for eurozone, which doesn’t include the UK, growth again. The 15 nation group will only grow by 1.3% this year compared to projections of 1.7%. The 15 nation group also saw its economy shrink by 0.2% between April and June for the first time ever since it started in 1999. That was blamed in a reduced number of exports and a reduction in customer spending.
There is a gloomy outlook for all of the countries and the UK is no different. With the slump in house prices and very volatile financial markets the European commission believe that the UK economy will decline by an annual rate of 0.2% in the next two financial quarters.
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