UK recession is now considered almost as likely as not by economists, a poll revealed yesterday. The median probability attached to UK recession in the next 12 months has jumped to 45%, in the latest poll from Reuters.

UK recession is now considered almost as likely as not by economists, a poll revealed yesterday.

The median probability attached to UK recession in the next 12 months has jumped to 45%, in the latest poll from Reuters, from 40% in a similar survey conducted by the news agency last month.

This median probability has risen significantly from 25% in May.

The median growth forecasts of economists signal it will be a close-run thing whether the UK ends 2008 in technical recession, defined as two consecutive quarters of contraction.

Economists' latest median forecasts are for contraction of 0.1% in UK economic output in the three months to September 30, and for gross domestic product to be unchanged between the third and fourth quarters. These projections are only a hairsbreadth from recession.

Since last month's poll, economists' median forecast of UK growth in 2008 as a whole has fallen from an already-weak 1.5% to 1.4%. This would be the lowest rate of growth since the 0.2% recorded in 1992, when the UK was clawing its way out of the early-1990s recession.

Economists' median prediction of growth in 2009 as a whole has since last month fallen from 1.0% to 0.9%.

Forecasts for both 2008 and 2009 are way adrift of the UK's longer-term average rate of growth, which is generally put at around 2.5% to 2.75% per year.

Official data and survey evidence have in recent months pointed to an ever-more bleak outlook for the UK economy. Consumer confidence has plummeted as house prices have fallen sharply.

Surveys from the Chartered Institute of Purchasing and Supply have shown the UK service, manufacturing, and construction sectors in increasingly grim shape.

The Bank of England's inflation report, published last Wednesday, predicted that UK economic output would stagnate "over the next year or so".

Bank Governor Mervyn King, acknowledging the danger of recession, highlighted the "possibility of a quarter or two of negative growth".

The Reuters poll shows UK economists' median forecast of consumer prices index inflation in 2008 as a whole has risen to 3.7% - up from 3.5% in last month's survey and nearly double the 2% target set for the Bank of England by the Treasury. The median prediction is for inflation of 2.7% in 2009.

Annual UK consumer prices index inflation jumped from 3.8% in June to 4.4% in July.

The inflation report last week showed the Bank's Monetary Policy Committee now expects benchmark annual UK consumer prices index inflation to be below its 2% target on its chosen two-year time horizon, after peaking at or above 5% in the near term.

However, the MPC considers the risks to its medium-term inflation projection lie to the upside.