08 October 2008

Expect stagnation for the next 15 months

The economy will be in stagnation for the next 15 months and household credit will remain particularly tight during this period, delegates at the ABTA Travel Convention were told.

The gloomy prediction came from Mark Pragnell, the managing director for the Centre for Economics and Business Research, who warned that the economy was "teetering on the edge".

He also claimed newspaper advertising would fall by a further 12 per cent in 2009.

Pragnell called for a cut in interest rates as early as this Thursday and predicted they would fall to three per cent by 2010.

He expected sterling to weaken against the dollar, with the pound worth $1.65 in 2009, while he said oil prices would fall to $80-$90 a barrell next year.

"The recession could be much deeper without the government acting," he said.

by Jeremy Skidmore

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