BRITAIN could be heading for a recession next year, claims a new report.

Accountants Coopers & Lybrand claim the threat of low or zero growth in the economy in 1999 had loomed closer over the last six months under the burden of a strong pound, the Asian crisis and falling consumer confidence. In its UK Economic Outlook report it predicts the hard landing could be a milder version' of the recession in the early 1980s. Rosemary Radcliffe, head of economics at Coopers & Lybrand, said: "Given this uncertainty, we believe the Bank of England was right to leave interest rates unchanged last week." The report said there were similarities in the economic conditions now and in the early 1980s. In both times there was an overvalued pound, tight monetary and fiscal policy imposed by an enthusiastic new Government. Indicators of a recession already occurring in some areas include the possibility of a deep recession in Japan and exporters being hit by the strength of sterling.

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