The UK is set for another recession, according to research from the National Institute of Economics and Social Research, (NIESR). In a press release published today, it forecast a contraction of the economy to 0.1 per cent in the UK, with unemployment set to rise to nine per cent

The think tank blames the fiscal austerity measures introduced by the Government and also the financial problems in Europe – the UK’s biggest trading partner – where market conditions are not expected to improve any time soon.

NIESR, however, said it expected a positive resolution of the euro crisis and that Europe would meet its debt obligations, meaning that the second half of the year should begin to look brighter.

According to the research, the UK economy currently suffers from deficient demand and current austerity measures are partly to blame. It has suggested a temporary easing of fiscal policy to help boost the economy.