The UK will fall back into recession next year with the economy shrinking by 1.3 per cent, according to Standard Chartered.
The bank, which recently topped a ranking of 354 global firms for the accuracy of its forecasts over the past two years, believes the mounting crisis in the eurozone will result in its economy shrinking by 1.5 per cent.
It has also predicted the US economy will grow by 1.7 per cent over the course of next year.
Overall, the bank says 2012 will be seen as a “two-speed” global economy, with a fragile West but a resilient Asia, Africa, Middle East and Latin America.
The world economy, it says, grew by 4.3 per cent in 2010, before cooling in 2011, when it grew by around 3 per cent. In 2012, SC predicts global growth slowing to 2.2 per cent over the year.
Chief economist and group head of global research Gerard Lyons says: “This points to the continuation of a two-speed world where a fragile West contrasts with a resilient East. It is a divided and disconnected world economy facing major policy dilemmas. Yet, no region is fully decoupled from events elsewhere.”