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PBR: Economy to contract by 4.75% in 2009

Chancellor Alistair Darling has admitted that the UK economy will contract by 4.75 per cent by the end of the year.

In his pre-Budget report today, the Chancellor conceded that the economy will have fallen by more than 1 per cent more than he initially predicted in the 2009 Budget. In April, he said GDP would contract on 3.5 per cent.

Darling predicts that GDP would return to positive territory in 2010, and will increase by 1.5 per cent over the year, then as much as 3.5 per cent by 2012. GDP is currently at -0.3 per cent.

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