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Lots of 'downsides' to come, warns Darling
Joe Murphy, Political Editor29 Jan 2009
A bleak warning of serious economic "downsides" ahead was given by the Chancellor today.
Alistair Darling said 2009 would be a bumpy ride, although he insisted that a recovery would follow.
"As we get through this, it is important to know that from here, in early January, we are going to see a lot of downsides," he said in an interview with the New Statesman.
The comments by the Chancellor, who last summer presciently predicted that the world slump would be the worst for 60 years, were a strong signal that the Treasury will have to revise its official forecasts downwards from the autumn prediction that the downturn would bottom out this year. New figures showed house prices fell for the 15th month in a row during January, wiping a further £2,500 off the average cost of a home, and economists warned of worse to come.
Sir Howard Davies, a former Bank of England policymaker and now director of the LSE, said: "In the US and the UK, people are going to get poorer. They are going to have to spend less than their income for a while as the economy deleverages. That is going to be politically extremely painful."
The Government was reeling today from political damage caused by a report from the International Monetary Fund that said Britain was likely to be harder hit than other western economies. Its verdict was embarrassing for Gordon Brown, who has repeatedly said the country was better placed than others to ride out an economic crisis because of his policies.
Huge debts, a housing bubble and heavy reliance on the credit-crunched financial sector had made Britain particularly vulnerable compared with other developed nations, the IMF said.
It predicted the economy will shrink by 2.8 per cent this year, more than twice as bad as previously thought and well above the two per cent average for advanced countries. Downing Street disputed the analysis, saying Japan and Italy were faring worse than the UK.
But Howard Archer, of IHS Global Insight, said the IMF forecast was "depressingly realistic", saying the shrinkage could be as bad as 3.1 per cent this year. Gordon Brown made a great play of the growth in the economy compared to the rest of Europe," he said. "It raises the question of whether the UK is in as structurally a sound position that we thought it was."
Reader views (26)
An unelected PM who brought in costly PFI's, wouldn't properly renationlaise the railways, chronically underfunded the armed forces, led a 'light touch' regalatory policy that has helped wreck the City and his equally inept replacement as Chancellor, have brought the country to the brink and they're not due out until 2010, time for a vote of no confidence, shame many labour MP's are turkey's who won't vote for xmas!
- Chaz, Perth, Australia, 30/01/2009 04:04
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The bunch of comedians who have piled onto this abuse bandwagon seem to have forgotten very rapidly that governments are now having to sweep up the piles of rubbish dumped on us by the cynically disordered banking and finance industries.
- Barrie, essex UK, 29/01/2009 18:52
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Yes mate.
Several hundred McLabour Commons' seats in 2010,
for starters!
- Dave, cumbria, 29/01/2009 18:49
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Can the Conservatives government put them in prison, when they take over? Gordon Brown are lying and are even bad at that and they should be prosecuted. I want to see them in jail for what they have done.
- Jacqueline, Hampstead, London, 29/01/2009 17:40
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I wish Groucho Darling would stop telling us the blooming obvious.
- Paul, bolton uk, 29/01/2009 17:35
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How could all this have been seen by people around the world and yet our Government still managed to let things get so bad.
Who is not already aware that this is going to be far worse than anything in history and will take even longer to recover from? It is not hard to work out that this country's housing market will never actually get back to where it was.
Still people are buying houses, are they mad? Do they not know everything is still going to drop?
- Serox, London, 29/01/2009 16:45
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It's bad, isn't it? They haven't the balls to tell us: it's like having a child trying to break it to us gently that they might have, sort of, well - you know, umm, well . . . been expelled!
Except this lot are grown-up, so they aren't giving the Electorate a chance to do that.
- Roz, Chamonix, France, 29/01/2009 16:27
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Brown will go down in history for having wasted more money than any previous Chancellor. What a legacy for someone who just wanted to be a big man.
- Dan, Manchester, 29/01/2009 16:24
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I think these same politicians, who are now saying, its nothing to do with us, its a global crisis, are beyond the pail and guilty as hell for not spotting Garages selling for £200,000 in the Old Brompton road and 125% mortgages to people who could never pay it back. However Darling, every now and again, does appear to tell it the way it is. And he did walk into the storm, created by Brown, just as a sleepwalker might, just as Mr Obama is walking into the tsunami in the U.S. innocently oblivious of his predecessors full and fatal errors.
- Bondy, london, 29/01/2009 15:14
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A lots of downsides until Crash and his sidekick are gone. Look at the boost that the USA and Iceland got with their new government! Why can we not get an election before Nu Labor's term is up?! Britain is looking more an more like Zimbabwe: a basket case.
- Georgie, Islington, London, 29/01/2009 15:12
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There is bound to be downsides when the country is run by a bunch of backsides.
- Tom, Watford (UK), 29/01/2009 13:59
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What are the mechanisms for the opposition parties to call for a vote of 'No-Confidence'? The IMF have drawn a line in the sand with their statement, which is at odds with the line the government has been spinning. If we the voters have doubts, if the markets can't believe the cabinet, then surely it is the duty of the opposition parties to go full steam ahead and topple this bankrupt administration. Is there any other credible option? Time is running out.
- Ged, Ramsgate, Kent, 29/01/2009 13:55
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We would be better off having the IMF overseeing the Chancellor rather than the current loafer
- Wallytrader, London, 29/01/2009 13:30
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Lot's of downsides? What exactly have been the upsides to all this?????
- Emma, london, 29/01/2009 13:30
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What a pitiful pair they are .The Prime Minister in denial , unable to answer any question without repeating his well rehearsed and often repeated mantras (usually nothing to do with original question ) and the Chancellor whose forecasting skills and judgement seem none existent. Not surprising to learn that even Labour MPs are at long last realising what a useless couple they are. To complete the circus ,how about the Foreign Secretary leading another putsch.
- Ian Glen., Durham. England., 29/01/2009 13:29
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Are he and Crash Gordon the only two people in this country who think they're doing a good job? These two are clearly way out of their depth, better suited to "town hall" beaurocracy.
- David, SOUTHAMPTON, 29/01/2009 12:59
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We should thank the IMF for giving us (the electorate) an unbiased prognosis and hint of what to do - send Labour to an indefinite stretch of warming the Opposition benches
- Toks, London,UK, 29/01/2009 12:58
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What an incompetent numpty this man is. Totally out of his depth and no idea what he is doing. Darling and Mr Bean are making it up as they go along, ignoring all professional advice from organisations such as the IMF and living in absolute denial concerning the problems they are causing. They have known the seriousness of this crisis for months and are slowly leaking the bad news bit by bit (no doubt on the instructions of Mandelson - the spin (lies) wizard). Their incompetence knows no bounds and I fear they will bring the country to its knees (if they haven't already done this!).
Their dishonesty and deceptions are now becoming transparent and their days must be numbered!!
- David, London, 29/01/2009 12:30
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But there will be a HUGE upside when Darling and Brown get a kick in the backside from the voters.
- Nobby Clark, Perth, the Scottish one, 29/01/2009 11:33
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Mr.Darling. Man of the understatement.
- S-M Hearmon, London, UK, 29/01/2009 11:20
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I think 100% of voters would be willing to cope with the "downsides" and wait for recovery - if only Brown and his little Darling would step down.
- R.F., Yorks, UK, 29/01/2009 11:07
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NOT FIT TO GOVERN.
- Albert Hall, Carshalton, England, 29/01/2009 10:46
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"we are going to see a lot of downsides," says Darling. The main downside I can see for the next 12 months is that Brown, Darling & co will still be in charge. They'll still be running around like "headless chickens" pretending that it's all a global issue, nothing at all to do with the way the UK economy has been run in the last 10 years, and believing that their current manic and irrational policy of DO ANYTHING will actually make a difference. The real problem we face between now and 2010 is that nobody (in the UK or internationally) has any confidence in Brown or his government.
- Malcolm, London, 29/01/2009 10:43
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The biggest downside for Darling et al will the be a massive hoof from the voters when McMitty finds the bottle (unlikely) to call a General Election.
- Ted, London, 29/01/2009 10:42
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"Lots of 'downsides' to come, warns Darling"- Yep, the biggest one being that the bunch of shysters that he belongs to will probably cling to power until 2010.
- Keith Lonsdale, Doncaster, 29/01/2009 10:33
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If Darling and Brown resign, there will be 2 less.
- Dave Davies, Basingstoke, 29/01/2009 10:15
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