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World Markets Gloomy as Global Recession Fears Persist


After another down session on the European markets, the talk is how long and deep the recession will be. For VOA, Tom Rivers reports from London.

The European markets have had a lot to digest during the past few days. With Euro Zone growth grinding to a halt and further afield in places like Japan, where the economy has officially joined the ranks of countries in recession, optimism is in short supply.

And that gloomy sentiment is evident in the downward trend in European trade.

Despite the mood, British Prime Minister Gordon Brown, back in London after last weekend's G-20 economic summit in Washington, says the way out of this global problem is a coordinated global approach.

"The managing director of the International Monetary Fund has joined many other people today in calling for a fiscal stimulus," Brown said. "A fiscal stimulus means helping families and helping businesses now through this difficult position and as long as you have, as we will have, a medium-term framework for fiscal sustainability, then this is the right thing to do facing the downturn. It is right, as now almost everybody accepts across the world and every country is now looking at this, that we help people through these difficult times."

IMF head Dominique Strauss-Kahn says the body is likely to need at least $100 billion of additional funding during the next half year if it is to play a larger role in aiding a global economic recovery.

But 2009 promises to be a financially difficult year around the world and in Britain, like elsewhere, that means further economic pain.

Britain's largest business lobbying group, the Confederation of British Industry warned rising British unemployment levels will probably peak toward the end of next year. CBI Chief Economic advisor Ian McCafferty says it will be a tough time.

"We are currently seeing the fastest rises for some 17 years and I think we believe that we will see two million [unemployed] by the end of this year," McCafferty said, "and by the time we see the end of 2009 or early 2010, it will have peaked out at not far short of three million. So that is rising (at) eight or nine percent of the workforce. So, that is a significant increase from where we have been in recent years."

Going hand in hand with the rising unemployment trend, the CBI predicts Britain's GDP will show its sharpest fall since 1991 as well.

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