Economy facing slowdown - Financial Services Recruitment - Emu Consulting

The UK economy is set for a ''rapid, painful adjustement'' over the next two years, according to an influential economic forecasting group.

Growth will fall from 3.1% in 2007 to 1.8% this year and 1.5% in 2009 unless the government acts decisively predicted ernst and Young's Item club.

Employment will hold steady while manufacturing will reap the benefit of the strong pound.

House prices will fall by 10% in the next two years, while the number of people moving home will shrink by 40%.

And with consumers less able to borrow money because of lenders' stricter loan criteria, the growth in consumer spending will slow from 3% last year to 1% in 2008 and 2009, it predicted.