Speaking in his pre-Budget report, Darling said output for 2008 will be 0.75 per cent, while output in the first and second quarter of 2009 is expected to be negative, before recovering in the second half of next year.
He predicted growth will be between 1.5 per cent to 2 per cent in 2010 and then continue to grow. Inflation is also expected to fall to 0.5 per cent, making room for the Bank of England to cut interest rates, Darling said.
The Chancellor also says borrowing is to rise from £98bn to £118bn in 2009. It
will be £105bn in 2010, £87bn in 2011, £70bn in 2012 and £54bn in 2013.
Darling said the pre-Budget economic forecasts are made against “sharply deteriorating conditions across the world”. He said: “We need action now to boost UK economic activity to emerge quicker and stronger from these difficult times.”