By Brian Swint Oct. 18 (Bloomberg) — The U.K. economy will grow twice as fast as previously expected next year as the country pulls out of the worst recession in a generation, Ernst & Young LLP’s Item Club will say tomorrow. Gross domestic product will increase 1 percent in 2010, compared with a 0.5 percent forecast in July, the researchers, who use the same model as the U.K. Treasury, will say in London. The estimate for 2009 will be lowered to a 4.5 percent contraction from a 4.4 percent drop. The Bank of England will assess the progress of its 175 billion-pound ($286 billion) program to buy bonds with newly created money as the interest rate -setting panel produces economic forecasts in November. Britain probably escaped recession in the third quarter after five quarters of contraction, a Bloomberg News survey shows. “The outlook for the next 12 months is certainly looking more positive than the last year but it is going to be a bumpy ride,” Peter Spencer , chief economist at the Item Club and a former Treasury official, will say. “There could still be substantial pain.” Gross domestic product rose 0.2 percent in the July- September period, the first increase in six quarters, according to the median of 33 forecasts in a Bloomberg News survey. From a year earlier, output dropped 4.6 percent, the survey showed. The Office for National Statistics will release the data on Oct. 23. To contact the reporter on this story: Brian Swint in London at bswint@bloomberg.net .
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U.K. Economy Will Grow Twice as Much as Forecast in 2010, Item Club to Say
