“UK economy brought to grinding halt by euro crisis,” headlines the Daily Telegraph, after a report by the Ernst & Young ITEM Club warned that Britain’s economic situation is “worse than we thought”. According to the chief economic advisor to the Club, “The bright spots in our forecast three months ago - business investment and exports - have dimmed to a flicker as uncertainty around Greece and the stability of the Eurozone increases.” The Club expects the British economy to grow by a mere 0.9 percent for 2011, which means “almost zero growth before the end of the year.” With public sector cuts starting to bite, the ITEM club also forecast that the UK’s unemployment rate would increase to 2.7 million people by the spring of 2013. The authors of the report prescribe tweaking with stamp duty and “targeted tax relief” in order to stimulate growth, but can only look on gloomily at the “lacklustre response of European leaders to the ongoing single currency crisis.”
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