UK economy to see worst slump since 1980

The UK economy will shrink at almost twice the pace previously forecast this year as the credit famine plunges the nation deeper into the worst recession in almost 30 years, the Confederation of British Industry said.

Gross domestic product will contract 3.3 per cent, instead of the 1.7 per cent predicted in November, the biggest UK business lobby said on Monday.

By the end of 2009, the economy will have contracted for six consecutive quarters, it said.

“The world has changed dramatically,” Richard Lambert, the CBI’s director general, told reporters in London.