Citigroup: Britain is heading for a lengthy and deep recession

According to Citigroup (NYSE:C), UK house prices are to drop a further 15 percent in 2009, and UK companies will face a 45 percent drop in earnings as we head into a deep and lengthy recession.

With consumer spending in the UK tagged 80 percent to house prices over the last 25 years, compared to 50 percent in America, 10 percent in Germany and in Italy only 5 percent is geared to house prices. One thing is for sure it’s not looking good for the Britain.

According to Citigroup, trades such as automobiles could lose 82 percent this year and retailers could also decline 64 percent in 2009, healthcare, gas, water and electric being among the rare few sectors that are relatively safe havens.

The price-to-earnings ratio has fallen to its lowest level since the 1970s and the rate of return on equity will halve to 8.7 percent in 2009.

Source: Telegraph

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