The British economy looks to be sailing into stormy seas over the next two years, with economic growth poised to lag behind that of the country's main international competitors, a think tank said yesterday.
The Center for Economics and Business Research (CEBR) predicted in its latest quarterly review that with consumer spending set to slow sharply Britain would fall "to the relegation zone of the world economic league table" by next year.
That, it added, could wreak havoc with the public finances, and potentially blow a hole in Chancellor of the Exchequer Gordon Brown's ambitious spending plans which are based on a rosier outlook than the CEBR believes to be justified.
The study said that having grown faster than any other major economy in 2001, and at a respectable pace last year, Britain will see growth slowing to a meagre 1.3 percent this year. While the CEBR expects growth to pick up slightly to 1.5 percent in 2004, that would leave it well behind the US (2.4 percent), the euro zone (2.2 percent) and even sickman Japan (1.8 percent).
Unemployment, which in November fell to a 27-year low of 934,000, will rise by 298,000 (32 percent) by 2005, the CEBR said.
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