//
According to the Ernst and Young Item Club, the economy will shrink by one per cent next year, before doing the reverse in 2010.
Peter Spencer, the club's chief economist, told the BBC: "Recession is already baked in the cake."
"We desperately need a global solution given the heavy dependence of our banks and borrowers on cross-border banking flows."
On a brighter note, he also said inflation is likely to fall, allowing the Bank of England to begin cutting interest rates.
A recent British Chambers of Commerce survey also found that most businesses thought the UK was going through a recession.
Technically, the UK will be in a recession when the economy sees two successive quarters of negative growth.
In total there have been five full-blown recession since the Second World War: 1974, 1975, 1980, 1981 and 1991.
Become an independent investor with the help of Knowledge to Action.
