British finance minister Alistair Darling acknowledged on Sunday he had wrongly forecast Britain’s economy would be in recovery by the second half of the year.
Darling, due to present his annual budget on April 22, said in an interview with the Sunday Times that now he did not expect the economy to come out of recession before the end of the year at the earliest. He said GDP figures for the first quarter of this year would be bad. “We won’t get the figures for another month, but we think they will be bad, because if you look around the world there’s nothing that tells you otherwise,” said Darling.
“I thought we would see growth in the second part of the year,” he said of the pre-budget report forecast he made last year.
“I think it will be the back end, turn of the year time, before we start seeing growth here.”
The Organisation for Economic Co-operation and Development said last month Britain’s economy would shrink by 3.7 per cent this year, its fastest pace of decline since World War Two.
The economy shrank by 1.6 per cent in the last quarter of 2008 and the newspaper quoted Treasury officials as saying the fall for the first three months of this year could be at least as big.
Darling criticised bankers who expected a return to the big bonus culture when the economy recovers, warning them that there needed to be a cultural change in the industry.
“I still come across people in the banking industry who give you the distinct impression that once this is all over, we’ll be back to where we were,” he said.
“The culture needs to change, the attitude needs to change. I’m afraid there are still people out there who don’t realise the world has changed.”