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The city of London faces a severe recession and the UK economy is set to follow the US into a sharp downturn, according to a gloomy prognosis from the billionaire financier George Soros.
Faced with over-valued houses, mountains of personal debt and a rise in unemployment, the UK is especially vulnerable to the effects of the credit crisis sweeping through financial markets, Soros said, and he warned not to expect a rebound at any point in the near future.
Indeed, the crisis is so serious that it will up-end 25 years of free-market thinking and bring to an end an era of cheaper and easier borrowing, he predicted.
"It is not going to be like the 1930s - we are not going to allow financial institutions to fail - but this is a historic event like the Great Depression was."
In the UK, as in the US and the rest of the developed world, "ever looser lending standards and more aggressive supply of mortgages" have contributed to a house price bubble but, said Soros, "I think we have come to the end of the road".
"To say that it won't affect the real economy is untenable, because it affected it on the upside, so it will affect it on the downside. Recession in the US is inevitable.
"There will be implications for the globalised economy and the UK happens to be as vulnerable as the US, but in different ways. The finance industry is much more important to the UK because London is a financial centre and the industry is going through a painful process of deleveraging.
"The housing market in the UK has at least not seen the building boom that we have seen in the US and the supply of new homes has not gone up, but on the other hand, the indebtedness of UK households is actually even greater relative to income than in the US."
The jobless rate in America rose to 5.1 per cent in March, the highest level since September 2005.
The views of a Hungarian who made his fortune in US hedge funds have always had a piquancy in the UK, where he is feted as the man who "broke the Bank of England".
His heavy bets against sterling helped force it out of the European exchange rate mechanism in 1992, netting himself an estimated $1bn profit that Black Wednesday. The Independent
