Economist predicts 2011 double-dip recession

The UK is heading for a double-dip recession next year, according to predictions made by economist Professor Roger Martin-Fagg at the recent Broker Network conference in Harrogate.

Martin-Fagg predicted the recession could last as long as 18 months, and added that 2011 would see GDP shrinking 1% in real terms, the result of a 3% overall GDP rise compared to an inflation level of around 4%.

“Next year is going to be disappointing,” said Martin-Fagg, adding that he believed the UK would need another four years to leave the current financial crisis.

Martin-Fagg said the incoming Basel III banking reforms were “an entrenchment” of Basel II, which he said let banks run their businesses with reduced capital, and added: “The international banking system is going to be much more constrained as to how much money it can create.”