THE UK economy needs to look overseas for a way out of recession, according to a new report by Ernst & Young.
The latest E&Y Item Club forecast says that after years of relying of domestic spending and borrowing, the economy now needs to focus on saving and exporting.
E&Y chief economic advisor Professor Peter Spencer said: “The UK is facing another challenging year. We are no longer in a position to borrow – the massive debts that we racked up in the last decade now need to be repaid.”
The Item Club forecasts that GDP will struggle to reach one per cent this year, with interest rates likely to remain flat well into 2010.
Spencer says UK firms need to chase overseas customers in growing economies such as China, rather than wait for spending to pick up at home.
“Growth is almost totally dependent on a sustained upturn in the world economy,” he said.