UK economy brought to grinding halt by euro crisis
British taxpayers may be dragged into a rescue package for the eurozone after a leading forecaster warned that the crisis has brought this country’s economy “grinding to a halt”.
By Robert Winnett
17 Oct 2011
The Ernst & Young ITEM Club, which uses the Treasury’s forecasting models, warns today that the economic situation is “worse than we thought”.
It concludes that the “bright spots” in Britain’s economic recovery have “dimmed to a flicker” because of the ongoing crisis in the single currency.
George Osborne, the Chancellor, and Tim Geithner, the US Treasury Secretary, are becoming increasingly exasperated at the lacklustre response of European leaders to the ongoing single currency crisis.
Europe is expected to finalise plans for a two-trillion euro bailout for the single currency area over the next week.
However, there are growing fears that the package will fall short. The International Monetary Fund (IMF) is expected to be asked to help shore up Italy and Spain, if this becomes necessary – a move which could lead to British taxpayers facing a multi-billion pound bill.