Bloomberg News

Greek Euro Exit May Put U.K. in Recession, Chote Says

May 22, 2012

(Corrects to “threatens to” in first paragraph of story originally published May 19.)

A Greek exit from the euro threatens to send the U.K. into a recession equal to the downturn in 2008 and 2009, Robert Chote, chairman of the U.K.’s Office for Budget Responsibility, told the Guardian in an interview.

“The concern is that you end up with an outcome in the euro zone that creates the same sort of structural difficulties in the financial system and in the economy that we saw in the past recession,” Chote told the newspaper. “That has consequences both for hitting economic activity in the economy, but also its underlying potential.”

Chote said the deepening crisis in the euro area may force him to revise his forecast made two months ago that the U.K. economy would grow 0.8 percent this year. A second deep recession may cause permanent damage to the economy, he said.

“You go down and you never quite get back up to where you started,” he told the Guardian.

To contact the reporter on this story: Nicholas Larkin in London at nlarkin1@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net


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