Last week, Business Monitor International (BMI) published a special report, ‘Britain On The Brink: UK Economy Sliding Out Of The Global Premier League‘ outlining our bleak prognosis of the country’s economy.

Among its key findings, the report forecast that Britain will suffer a far deeper recession than either the UK Treasury or IMF predicts, with the economy contracting by 3.5% in 2009, followed by a shallow 0.2% recovery in 2010. Unemployment will peak at 11.2% next year, the pound will remain weak for the next three years, and the budget deficit will swell to an unsustainable 9.3% of GDP in 2009, and average 6.7% over the following four years. Furthermore, property prices will fall 41% from peak to trough, potentially taking more than 10 years to return to 2007 levels.

BMI’s special report has since been cited in a number of media outlets, and I am very pleased to announce that my esteemed colleague, Terry Alexander, Head of Country Risk and one of the key authors of the report, appeared on SKY News’ Jeff Randall Live programme last Friday, February 13 2009.

Used with kind permission of SKY News.

In light of my long-held bearish view towards global equities, and the fact that the deleveraging process will continue, I expect the dollar to remain well supported. This will also help keep a lid on any sterling recovery.

Tags: Britain, budget deficit, Economy, forecasts, GDP, international comparisons, property prices, recession, UK, unemployment
Posted in: Currencies, Equities, General, Political Risk, UK, US
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