The UK economy could decline for another year and take a further two years to recover

A National Institute of Economic and Social Research study says the current economic decline is "very similar" to the slowdown at the start of the 1980s.

The latest estimate predicts a 1.5% decline in the first quarter of 2009.

In a separate study by Nationwide, UK consumer confidence fell in March as worries continued about jobs.

The building society's consumer confidence index dropped two points to 41.

The Bank of England's Monetary Policy Committee (MPC) begins its latest interest rate-setting meeting on Wednesday, with its decision due to be announced at midday (1300 GMT) on Thursday.

The MPC is not expected to cut the Bank rate further from its current record low of 0.5% having cut the rate six times since October in attempt to boost the economy.

Jobs market

UK unemployment recently hit two million for the first time since 1997.

Nationwide said consumer confidence was "broadly stable since the start of the year, but feelings about the current labour market have weakened".

"Further reports of job losses are likely to have affected consumers' views of this," the report said.

Nationwide said consumers' confidence fell for the ninth consecutive month in March.

The building society's survey came as a report from the Recruitment and Employment Confederation/KPMG showed little sign of a strong recovery in the number of permanent jobs available in the UK.

Although its "permanent placements indicator" rose to 33.5 in March from 30.3 in February, that was still well below the 50 level, where growth begins.

"These latest figures leave no doubt that the UK jobs market is at its worst in the 11-year history of the survey and recovery might take longer and be more protracted than many hope," said Mike Stevens, partner and head of business services at KPMG.

However, the Nationwide's survey of 1,000 consumers indicated that they had became more optimistic about UK economic conditions.

"Increased optimism towards the current and future economy is encouraging," said Nationwide's Fionnuala Earley.

The U.S. mantra of spend, spend, spend is starting to wear thin on the other side of the pond.

Treasury Secretary Timothy Geithner testifies on Capitol Hill Thursday before the Senate Budget Committee.

Europeans Could Balk at Geithner's Call for More Spending.the U.S. calls for more spending to jumpstart the global economy, more Eastern European countries are coming to the table hat in hand, looking for financial help from the International Monetary Fund and other groups .

European countries appear to be at odds with Treasury Secretary Timothy Geithner's fresh calls to unleash more stimulus money and free up a half-trillion dollars to lend to struggling countries.
It could lead to a tense discussion as Geithner heads to Britain to meet with finance officials from the Group of 20 nations Friday and Saturday. Those meetings come ahead of an April 2 summit of the G-20 in London.
As the U.S. calls for more spending, more Eastern European countries also are coming to the table hat in hand, looking for financial help from the International Monetary Fund and other groups -- but does the rest of the world have the money to give?
"We're just getting into the worst of the crisis in a global sense," said Ralph Bryant, a senior fellow at the Brookings Institution who specializes in international economic issues. "Many developing countries ... are just beginning to feel the really bad effects."
But European Union leaders recently rejected a request from Hungary for $241 billion in bailout money for the region.
"I think they're on a different page," Bryant said of U.S. and European financial officials. He said the calls by the U.S. for more stimulus money and international aid likely will stir controversy at the upcoming meetings.
Geithner on Wednesday called for a tenfold increase in the size of an emergency fund the IMF uses to help countries in trouble -- to as much as $500 billion. He also endorsed the IMF's call for countries to enact stimulus packages worth, on average, 2 percent of their GDP.
But in a report last week, the IMF said the U.S. was the only one of the world's seven rich industrial nations -- the Group of Seven -- on track to meet that goal.
"I think that the United States has actually taken a significant lead on a number of these steps that are required," President Obama said Wednesday, calling for "concerted action around the global to jumpstart the economy" at the G-20 meeting.
Some European nations are reticent to take on the kind of national debt the United States has been accumulating in recent months. European critics have charged that the United States' demand for increased stimulus spending was an effort to divert a European call for a major overhaul of regulations governing the financial system to curb the types of excesses in the U.S. that spawned the crisis. At a meeting this week of finance ministers of the 27-nation European Union, officials said they were doing enough already to support the world economy.
"Recent American appeals insisting that the Europeans make an additional budgetary effort to combat the effects of the crisis were not to our liking," Luxembourg Finance Minister Jean-Claude Juncker was quoted as saying after the meeting.
German Finance Minister Peer Steinbrueck recently said finance ministers from the EU's 27 nations were not pleased at U.S. suggestions that Europe has not done enough to stimulate the global economy.
Germany has been criticized for its reluctance to spend and stimulate its economy, Europe's largest. Their stimulus package was about 1.5 percent of its GDP this fiscal year, according to the IMF report. France's was about half that. (Meanwhile, countries like China and Saudi Arabia met or exceeded the United States' level of stimulus spending.)
However, European nations apparently are preparing to sign on to at least a partial version of the calls by the U.S. for more IMF funding.
The Times of London reported Thursday that the European Union was considering lending between $75 billion and $100 billion to the IMF to boost its lending ability. The Union also reportedly is calling for countries to help double IMF resources from $250 billion to $500 billion.
That $250 billion includes the $50 billion fund that the United States is talking about increasing. Calls to boost the fund have mounted as developing countries hit hard by the global downturn, particularly in Eastern Europe, have so far tapped about $50 billion from the IMF since November.
It's unclear whether European nations will go as far as Geithner is suggesting in helping the IMF, however. Bryant said a number of European countries favor raising some of the money from powerhouses like China, rather than shouldering so much of the cost.
The IMF reacted favorably to Geithner's announcement.
"We welcome the proposal from the U.S. Treasury. It's a very positive step toward assuring the global financial system that the IMF has the appropriate level of resources to meet the needs of its members," IMF spokesman William Murray said. He said the IMF is "optimistic" it can at least double its resources in the way the EU is suggesting.
Japan already has committed to lending an additional $100 billion.
Obama and Geithner kept high hopes about the upcoming meetings.
"I'm actually optimistic about the prospects," Obama said Wednesday, citing recent meetings he had with British Prime Minister Gordon Brown and Japanese Prime Minister Taro Aso.
"Everybody understands that we're in this together. I think the G-20 countries are going to be seeking a lot of cooperation."
Geithner said he would seek to build a "new consensus" in London on how to establish a "substantial and sustained program of support for recovery and growth."

Switzerland is relaxing key bank secrecy laws

UK Prime Minister Gordon Brown yesterday hailed announcement that Switzerland is relaxing key bank secrecy laws .Switzerland, Austria and Luxembourg announced a relaxation of their banking secrecy laws on Friday (13 March) following mounting pressures on both sides of the Atlantic to crack down non-cooperating tax zones.
The news comes only one day after Liechtenstein and Andorra made similar declarations, as a number of financial centres around the world attempt to pre-empt any decision coming out of the G20 leaders summit on 2 April.

As western governments feel the pinch due to expensive stimulus spending projects coupled with reduced tax receipts, the spotlight has been turned on a handful of geographic locations that profit by harbouring capital owned by companies and wealthy individuals from abroad.

The Swiss government said on Friday that it intends to adopt OECD standards on the sharing of banking information between different countries, citing its desire to avoid being placed on the organization's 'black list' of tax havens.
UK Prime Minister Gordon Brown said the changes were "the beginning of the end of tax havens." "Tax evasion, which costs the global economy billions of pounds each year, will become more difficult in future."

The European Central Bank has cut its key interest rate to 1.5% from 2.0%

Jean-Claude Trichet, President, ECB
Overall inflation rates have decreased significantly and are now expected to remain well below 2% over 2009 and 2010.


Euro rates hit record low of 1.5% .The European Central Bank (ECB) has cut its key interest rate to 1.5% from 2.0%, the lowest since it started setting euro rates in January 1999.

It followed a cut in UK rates by the Bank of England. US and Japanese rates are, in effect, already at zero.

At a news conference, ECB president Jean-Claude Trichet slashed his forecasts for eurozone growth.
The ECB is now predicting GDP this year in the 16-nation bloc will shrink by between 2.2% and 3.2%.

Its last prediction, made in December, was that growth would be between no change and a fall of 1% in 2009.

For 2010 it was predicting growth of between 0.5% and 1.5%. It is now forecasting growth of between 0.7% and minus 0.7%.

Non-standard measures

The revisions reflect Mr Trichet's view that the global economy has "weakened substantially in recent months" but that it will "gradually recover" in 2010.
But there were no new measures announced to help stimulate the eurozone economy, with Mr Trichet stressing that he was already using various "non-standard measures" and saying that the ECB's rate-setters were considering various others.

Slowing growth was confirmed by revised economic growth figures issued earlier on Thursday.

GDP for the last three months of 2008 was down 1.3% from the same quarter of the previous year, worse than the initial estimate of 1.2%.

The figure for the previous quarter was left unchanged at a 1.5% fall.

Thursday's decision was the ECB's fifth rate cut since October 2008, which has brought eurozone rates down from 4.25%.

Mr Trichet said that interest rates could still fall further from their current level, although he pointed out that they are already at a very low level.

He also said that inflation would stay below the ECB's target of below, but close to, 2%.

"Overall inflation rates have decreased significantly and are now expected to remain well below 2% over 2009 and 2010,"