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UK will not grow 'until third quarter of 2009'

Jan 19 2009

The UK will see five quarters of negative growth before things improve, according to an expert.

David Kern, chief economist at the British Chambers of Commerce, predicts the UK will experience growth in the third quarter of this year.

Kern adds that there are 'small signs' that the financial markets are less chaotic than they were previously, adding that they are showing 'a little more resilience' than the real economy, where things are getting worse.

He states the interbank market could be one of these signs of recovery, as the gap between the three month rates and the bank rate has narrowed.

Kern comments that when a recession occurs many of the causes are addressed through the recession, such as excessive personal lending and increased house prices.

'The financial position of individuals and companies improve, people run down stocks to the bare minimum and at some point the economy very gradually starts to improve but it is going to be a roll-out process,' the economist adds.

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