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Ernst & Young ITEM club forecasts difficult 2010

The renowned economic think tank which is the Ernst & Young ITEM club has today issued a statement suggesting that the economic outlook for the UK in 2010 is "dismal". The think tank is forecasting growth of 1% or less in the UK during 2010 and, contrary to recent export figures, believes an export led recovery is unlikely until at least 2011. There is also a belief that high debts and unemployment fears in the UK will dictate any potential consumer led recovery, leaving the UK economy in limbo during 2010.

However, on a more positive note there is a growing belief that the weak pound will at some stage instigated an export led recovery in the UK economy with areas such as Asia of particular interest to UK companies. The longer the pound remains subdued on the money markets the more attractive UK exports will become and the more likelihood they will pick up in the medium to longer term. However, as and when the UK economy does eventually start to recover we should see the pound strengthen which will counterbalance domestic demand against the competitive edge currently held by exporters.

While this particular report appears to have a negative slant there are positive indications for 2011 and beyond - although the timescale may not be to Gordon Brown's liking?

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