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Recovery from recession could be ‘three years’ away

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The UK economy could take up to three years to regain the levels of growth seen before the recession hit, a think tank has predicted.

According to its latest report, the National Institute of Economic and Social Research (NIESR) estimates that the economy shrank by 1.5 per cent in the first quarter of the year.

This follows on from the 1.6 per cent decline seen in the final three months of last year.

The NIESR report suggested that the severe rate of the slowdown bears similarities to the downturn of the early 1980s.

Recovery, the NIESR continued, could take almost three years.

It said: “If the 1980s profile were followed, output would continue to decline for up to another year and it would take two further years before the level of output enjoyed at the start of 2008 would be reached again.”