Independent UK: Britain 'in recession by end of the year'

[marmar]

Britain 'in recession by end of the year'

Dire economic warning casts pall over Gordon Brown's housing rescue deal

By Andrew Grice, Political Editor
Wednesday, 3 September 2008




The first official warning that Britain is about to slide into recession has overshadowed Gordon Brown's attempts to revive his political fortunes with a £1bn plan to kick-start the housing market.

Yesterday's gloomy forecast by the Organisation for Economic Co-operation and Development (OECD) contradicted declarations yesterday by the Chancellor, Alistair Darling, that he is "optimistic" about the British economy.

The OECD said that Britain would be the only one of the G7 group of leading industrialised nations to fall into recession during the rest of the year.

Under Gordon Brown's plans that were announced yesterday:

* About 10,000 first-time buyers in England will get free loans for up to five years, worth up to a third of the value of new properties, if their family income is below £60,000;

* Homes worth between £125,000 and £175,000 will be exempt from stamp duty for a year, saving buyers up to £1,750;

* Householders who run into trouble with their mortgage payments will be able to convert all or part of their mortgage into rent so they pay less, with councils, associations or developers taking a stake in the property;

* A total of 5,500 affordable homes will be built by councils and housing associations at a cost of £400m.

Mr Darling immediately faced criticism for being unable to say how he would fund the stamp duty cut that will cost the Treasury £600m. He is likely to have to cut other programmes to pay for the measure, which will be announced in his pre-Budget report (PBR) next month. In an attempt to stem the rising tide of repossessions, homeowners who lose their jobs will receive income support after 13 weeks from next April, instead of 39 weeks as at present. ......(more)

The complete piece is at: http://www.independent.co.uk/news/uk/politics/britain-in-.htmlssion-by-end-of-the-year-917194.html