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Darling 'was wrong' on recession Darling 'was wrong' on recession
(10 minutes later)
Chancellor Alistair Darling has admitted the Treasury got it wrong over the length and depth of the recession.Chancellor Alistair Darling has admitted the Treasury got it wrong over the length and depth of the recession.
In an interview with the Sunday Times he said the economy would not begin to grow again until the end of the year - later than he previously predicted. Since last autumn the world had seen "a much more severe depth of downturn" than expected, he told the BBC.
He told the paper he did not want to build up "false hope", although he did believe last week's G20 summit would speed recovery, he said. Mr Darling declined to forecast ahead of his 22 April Budget how much the UK economy would shrink this year, but did say "2009 will be a difficult year".
Later this month Mr Darling will issue his forecasts in the Budget. In an interview with the Sunday Times he said the economy would not begin to grow again until the end of the year.
"It's worse than we thought," the paper quotes him as saying. BBC political correspondent Iain Watson said Mr Darling had a "vested interest" in sounding a note of pessimism ahead of delivering his forecasts in the Budget.
BBC political correspondent Iain Watson said Mr Darling had a "vested interest" in sounding a note of pessimism ahead of delivering his forecasts in the Budget on 22 April. In an interview on the Andrew Marr Show, Mr Darling said that the UK economy's decline over the past six months had been steeper than the Treasury expected.
He said that the UK was a trading nation, so if world trade fell, the UK suffered.
Shrinking economyShrinking economy
The UK economy's decline over the past six months had been steeper than the Treasury expected, said the chancellor. This meant that measures agreed at the G20 to boost world trade would be crucial for the UK economy and help protect British jobs and "make the recession shorter than it might otherwise be".
In the earlier newspaper interview Mr Darling was asked if the worse was over for the British economy: "I think there is some way to go yet. A lot really depends on actually how much other countries do."
While he had previously thought the UK would see growth in the second part of the year he said: "I think it will be the back end, turn of the year time, before we start seeing growth here."While he had previously thought the UK would see growth in the second part of the year he said: "I think it will be the back end, turn of the year time, before we start seeing growth here."
Asked in the Sunday Times if the worse was over for the British economy he said: "I think there is some way to go yet. A lot really depends on actually how much other countries do." The Office for National Statistics (ONS) said the economy shrank by 1.6% in the last three months of 2008. That was the biggest fall in GDP (gross domestic product) since 1980.
The UK economy shrank even more than expected in the last three months of 2008.
The Office for National Statistics (ONS) said the economy shrank by 1.6% compared to the third quarter.
That was the biggest fall in GDP (gross domestic product) since 1980 and more than an earlier 1.5% estimate.
Last week Mr Darling has hit back at claims the rescue deal for the world economy agreed by G20 leaders would have little impact at home.
He insisted it would protect British jobs and "shorten what would otherwise be a long and painful recession".
Unemployment rose above the two million mark last month - its highest level since 1997 - and some experts believe it will have scaled three million by the end of the year.Unemployment rose above the two million mark last month - its highest level since 1997 - and some experts believe it will have scaled three million by the end of the year.
Mr Darling suggested measures would be taken in the Budget to increase help for people who have lost their jobs to get back into work.
He also said increased child benefits and tax cuts for some people coming into force this month, combined with measures taken in other countries to boost trade and a properly working banking system "would all make a difference".
But shadow business secretary Ken Clarke said that while he welcomed the G20 deal, the UK would be in a worse position "when we come out of this" and said the "consequences... will be with us for years to come".