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UK economy 'to be hit for 20 years'

Jan 29 2009

The UK economy will experience the worst recession since World War II and government debt will stay at pre-crisis levels for 20 years if taxes are not raised, new reports show.

Figures from the International Monetary Fund (IMF) reveal the UK economy is expected to decrease by 2.8 per cent this year, which is worse than the two per cent average estimated for other advanced nations.

Olivier Blanchard, chief economist of the IMF, says the organisation now predicts the global economy will 'come to a virtual halt'.

The financial group has downscaled chancellor Alistair Darling's prediction that the UK economy will bounce back by 1.5 per cent in 2010, estimating a recovery of just 0.2 per cent.

It comes as the Institute for Fiscal Studies says the government needs to raise an extra £20 billion to repair public finances.

The organisation states taxes should be increased or spending cut in order to find the money, as currently the UK's government debt will remain at high levels for 20 years.

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