Darling warns of deep recession

The Chancellor Alistair Darling has acknowledged Britain is "going into recession" but claims that, although it will be harsh, it should be over by 2010.

In his starkest admission yet that recession is inevitable, Darling told the Independent that "we are going into recession. I remain confident that we will get through it."

In his November 24 pre-Budget statement to the Commons, the Chancellor is expected to predict a short, sharp slump. He will forecast that the economy will shrink by more than one per cent next year but bounce back strongly in 2010.

As part of his 'mini Budget', Darling is also expected to announce a dramatic increase in public borrowing - up from the £43bn for the current financial year as predicted in the March budget, to around £65bn. In 2009, as recession takes hold, public borrowing is likely to surge to more than £90bn.

Darling's comments followed Bank of England Governor Mervyn King's admission yesterday that it was "very likely that the UK economy entered a recession in the second half of this year".