UK - '70% chance of another recession'

Economic think-tank the National Institute of Economic and Social Research (NIESR) has warned that the UK has a 70% chance of going back into recession if the eurozone debt crisis isn't resolved soon.

The UK economy has been stagnant over the last 12 months. The threat of a European debt default looming on the horizon could tip our economy into decline, according to the think-tank.

And it is equally pessimistic about the economy even if a resolution to the eurozone debt crisis is found - it says we still have a 50% chance of a double-dip recession.

Recent growth forecasts for the UK economy have been pretty down-beat. In fact NIESR predicts the UK will grow just 0.9% this year and 0.8% next year. If the economy's growth continues on that trajectory, we may not see a return to the pre-recession peak until 2013. Astonishingly that would be the slowest recovery since the First World War.

NIESR believes 'modestly' relaxing Government austerity measures could stimulate output and jobs. It predicts unemployment will reach 8.9% by the end of 2012.

Their gloomy outlook isn't limited to the UK - NIESR warns that there is a 50% chance that all of the 17 euro nations could go into recession this year, or the next, if action isn't taken quickly to deal with the eurozone debt crisis.