Forbes: Swine flu could devastate British economy

"I can't help to feel [the report] is a little on the pessimistic side. But the economy is so fragile that it is particularly vulnerable to any shock," said Howard Archer, chief U.K. economist at IHS Global Insight in London. "We are expecting next year to be a bumpy ride for the economy, between modest growth and modest contractions until the second quarter of 2010, when we expect a recovery."

SHOOT: And by implication the global economy. Interesting in this report is that the British economy will 'recover' on the back of a 'recovering' world economy. That assumes rather a lot I think, that the world economy will recovery. I believe we're still on the long way down, though some - especially those countries with resources and relatively small populations - may do better than others.

clipped from www.forbes.com The worst-case scenario means a 50% infection rate. In this case, swine flu could leave businesses without employees, consumers spending less on goods, and transport and tourism impacted as people stay away from public places to avoid infection, according to Hetal Mehta, senior economic advisor to the Ernst & Young Item Club. Another think tank, Oxford Economics, believes British GDP could shrink as much as 5% in total this year, thanks to the pandemic. In early July, the International Monetary Fund said it expects the economy to contract 4.2% this year but grow by 0.2% in 2010. Separately, Goldman Sachs said in a note to investors on Monday that Britain's economy risk of a "double-dip recession" was still "significant".