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| Version 1 | Version 2 |
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| Economy 'no longer in free fall' | Economy 'no longer in free fall' |
| (20 minutes later) | |
| The economy is no longer in free fall and a recovery next spring is likely, a renowned economic think tank has said. | The economy is no longer in free fall and a recovery next spring is likely, a renowned economic think tank has said. |
| Stabilising markets and the easing of credit conditions may well mean that the worst of the recession is over, The Ernst & Young Item Club said. | Stabilising markets and the easing of credit conditions may well mean that the worst of the recession is over, The Ernst & Young Item Club said. |
| It is forecasting the economy to shrink by 3.5% this year and by 0.1% in 2010. | It is forecasting the economy to shrink by 3.5% this year and by 0.1% in 2010. |
| However, it also said that the backdrop to Wednesday's Budget is "bleak" and warned that the chancellor has "limited options" in his spending plans. | |
| We face another 12 to 18 months of serious grief. Around 900,000 jobs will be lost this year and half a million next Peter Spencer, Item Club Firms urge minimum wage freeze | We face another 12 to 18 months of serious grief. Around 900,000 jobs will be lost this year and half a million next Peter Spencer, Item Club Firms urge minimum wage freeze |
| In the Budget, Alistair Darling is expected to predict economic contraction of about 3% of GDP this year - up from his earlier forecast in November of between 0.75% to 1.25%. | In the Budget, Alistair Darling is expected to predict economic contraction of about 3% of GDP this year - up from his earlier forecast in November of between 0.75% to 1.25%. |
| The Item Club believes that the revival of the bond market in January has enabled the UK's strongest companies to gain access to credit. | The Item Club believes that the revival of the bond market in January has enabled the UK's strongest companies to gain access to credit. |
| Its forecast was also encouraged by improved sentiment emerging in business surveys in the US, China and the UK. | Its forecast was also encouraged by improved sentiment emerging in business surveys in the US, China and the UK. |
| Job losses | Job losses |
| However, Peter Spencer, chief economic adviser to the Item Club, warned that the UK was not out of the woods yet. | However, Peter Spencer, chief economic adviser to the Item Club, warned that the UK was not out of the woods yet. |
| "We face another 12 to 18 months of serious grief. Around 900,000 jobs will be lost this year and half a million next," he said. | "We face another 12 to 18 months of serious grief. Around 900,000 jobs will be lost this year and half a million next," he said. |
| He also predicted a gloomy next 12 months for the housing market and the high street. | He also predicted a gloomy next 12 months for the housing market and the high street. |
| World trade is expected to decline by 9% in 2009, he added. | World trade is expected to decline by 9% in 2009, he added. |
| Meanwhile, the British Chambers of Commerce has called for the chancellor to provide more support for private industry in the Budget. | Meanwhile, the British Chambers of Commerce has called for the chancellor to provide more support for private industry in the Budget. |
| The business group wants a freeze on the minimum wage and a cut in small businesses' corporation tax. | The business group wants a freeze on the minimum wage and a cut in small businesses' corporation tax. |