The CEBR – Centre for Economics and Business Research, expects a shrink in the UK economy by almost 2.9% in the year 2009, which is more than any time ever since the 40s.

It also predicts a decline in the consumer spending and a slump in all forms of business investment. The forecasters also predict that the exporters will be helped by the fall in the pound’s value, however, their projection shall be held back by a global slowdown.

According to the CEBR’s research, the economy will contract by its biggest amount after the year 1946 where in the country was in the clutches of mass demobilisation after the wars. They also added that the economy is going through an agonizing readjustment as the consumers cut down on the spending because of ever increasing unemployment.

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Germany’s Commerzbank settles 9.8bn euros ($14.4bn; £8bn) worth deal with insurer Allianz to buy Dresdner Bank.

In UK, Dresdner has considerable operations and this move will cause 9,000 job losses in which around 1000 positions to be cut in the UK.

Recently, Dresdner had suffered a lot of loses because of the sub-prime crisis and to cover further loses Commerzbank and Allianz are contributing 1.25bn euros.

The deal seems to create a real rival for Germany’s Deutsche Bank, which is country’s largest bank.

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In an interview with the Guardian newspaper, Chancellor Alistair Darling admitted that the UK is passing through the worst economic crisis in sixty years and this economic downturn would be more profound and long-lasting than expected.

Darling also admitted that voters were not happy with Labour Party’s handling of the economic issues.

George Osborne (Shadow chancellor) said: “after Darling’s confession, the cat is no more in the bag about the state of the economy.”

Darling acknowledged that the government had clearly failed to get across its message that it realized people’s concerns about increasing job insecurity and rising cost of living.

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The UK economy is feared to move towards recession as the pound value wilts away against dollar in more than two years.

The Pound hits its minimum level and this fall is observed since July2006.

“The growth number confirmed our worst expectations,” said John Hydeskov analyst at Danske bank in Copenhagen.

Also there is rapid fall in the house prices in UK that seems to have no end, he further added.

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