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UK haunted by 'unholy trinity'

Jaimie Kanwar

There are three negative factors 'hurting the UK economy, claims the OECD...

According to the Organisation for Economic Co-operation and Development (OECD) the triple-threat is made up of:

• Weakening property markets.
• The global credit crisis.
• High commodity costs

As a result of these draining influences, the OECD predicts that UK growth will slow to 1.8% this year, and to 1.4% in 2009.

Jorgen Elmeskov, acting chief economist at the OECD, explained: "Our forecast is more negative than the one we produced six months ago. Some of the factors we were worried about, such as financial market turmoil, have actually materialized, so we expect growth to be weak throughout the whole of 2008."

The comments came in the OECD's twice-yearly economic forecasts. According to the report, real gross domestic product (GDP) growth in the OECD area is set to slow from 2.7% in 2007 to 1.8% in 2008, and 1.7% in 2009.
 
Mr Elmeskov added: “Despite the problems, central banks pumped billions of dollars into the banking system so we believe that the worst phase of the global credit crisis may have passed after

”Following the dramatic central bank rescues of Bear Stearns in the US and Northern Rock in the UK, the risk of a financial melt-down has definitely diminished somewhat,