Recession to hit Germany, UK and Spain

Economic growth is expected to post 1.4% in 2008 in the European Union (1.3% in the euro area) - around ½% less than forecast in April 2008. The main downside risks identified in the European Commission's Spring Forecast have materialised, with the financial turmoil deepening, commodity prices soaring and the shocks to several housing markets spreading more widely. Inflation is expected to average 3.8% in the EU and 3.6% in the euro area this year following the continued strong rise in commodity prices. This represents an upward revision, although inflation could be at a turning point as the impact of past increases in energy and food prices gradually fades in the coming months.

The UK, Germany and Spain would fall into recession in 2008, the European Commission predicted.

European Commission: Press Release: IP/08/1305: EU interim forecasts: sharper-than-expected slowdown http://europa.eu/rapid/pressReleasesAction.do?reference=IP/08/1305&format=HTML&aged=0&language=EN&guiLanguage=en

BBC News, 10.9.08: Britain 'to fall into recession' http://news.bbc.co.uk/1/hi/business/7607920.stm

Deutsche Welle, 10.9.08: Germany Headed for Recession, EU Commission Says http://www.dw-world.de/dw/article/0,2144,3633982,00.html

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