Balls Predicts Worst Downturn For 100 Years
The schools minister said that the recession could be worse than that of the 1930s.
This could be the worst recession for a century, a close political ally of Gordon Brown has said.
Ed Balls made the remarks in a speech at a Labour conference yesterday, the Yorkshire Post reports. If the forecast proves correct, it would mean that the current recession outstrips in severity the 1930s downturn, which saw the Great Depression in the US and the rise of authoritarian regimes across Europe.
The schools minister is reported as saying: "The economy is going to define our politics in this region and in Britain in the next year, the next five years, the next 10 and even the next 15 years. These are seismic events that are going to change the political landscape."
Shadow treasury minister Phillip Hammond described the comments as a "staggering and worrying admission". He told the BBC: "Is Ed Balls spilling the beans here and telling us that the government sees the situation as slightly more serious than they have tried to portray?"
The government currently forecasts that economic output in the UK will contract by one percent in 2009. However, other analysts, including those at the IMF, predict a far more severe downturn of approaching minus three percent.