British economy may decline by 3.5% this year

Chancellor of the Exchequer Alistair Darling forecast the worst recession in the UK since World War II as the banking crisis and rising unemployment curtailed spending and revenue to the Treasury.

The government expects the economy to shrink by about 3.5 percent this year, more than twice the estimate in November for a slump of no more than 1.25 percent, Darling told Parliament in London yesterday. He expects growth of 1.25 percent in 2010.

"No country can insulate itself from this worldwide downturn," Darling said. "I expect the economy to start growing again towards the end of the year."