OECD describes UK economy as most vulnerable

The Organisation for Economic Cooperation and Development (OECD) has released their assessment of the British economy indicating that the Bank of England must take the drastic action of rapidly cutting interest rates, as there is little room for any further tax cuts or pump priming that can be done meaningfully by the Treasury.

As part of its six month review on economic outlook, the UK is among several countries that the OCED have singled out as being most vulnerable to the global financial crisis.

A very worrying statistic out of the report is just how widespread the problem is projected to be, as within the 30-member countries, unemployment for 2010 is expected to be a around the 42 million mark.

The OECD chief economist, Klaus Schmidt-Hebbel, has revealed that the UK alongside Hungary, Iceland, Ireland, Luxembourg, Spain, and Turkey are likely to struggle over the next couple of years.

On a positive note, inflation is predicted to recede due to continued falls in both energy and food process. However, economic activity in the euro zone is expected to fall by up to 0.6 percent as both consumption and investment decline.

Heavy interest rate cuts through to 2010 are hoped to increase consumption with the global financial crisis beginning to ease.

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