Things appear to be going from bad to worse over in Britain. The latest growth forecasts from the OECD say the country is already in recession, and is the only major economy to reach this dreaded condition…so far. Ben Traynor at Fleet Street Daily says the outlook is grim for the the economy, the FTSE index and the British pound. But there are still ways to make profits when times are hard.

This from Ben:

Theo Casey and I have been taken to task by a reader. He writes:”Please, don’t encourage politicians to lie or be economical with the truth. It should not be acceptable to let them lie.”

It’s a fair one. You’ll recall that on Monday we were talking about Alistair Darling’s weekend truth outburst. The chancellor had told the nation what we all already know – that the economic situation is bleak.

“What Darling has done is confirm fears,” wrote Theo. “Consumers, investors and businesses that were not previously worried, now are. They have been told from the highest office in the land that it’s time to cut back.”

If you regularly read Fleet Street Daily, you’ll be used to hearing that things are bleak (I don’t especially enjoy writing as much, but the way things are are the way things are). But, believe it or not, there are some people who still set store by the official government forecast that the economy won’t enter recession. So you’d expect negative talk from the chancellor to have an economic impact (indeed it did. The FTSE 100 and the pound fell hard on the back of Darling’s comments).

But I take our reader’s point on board. We don’t encourage the chancellor to lie. We’re just acknowledging that his moment of honesty has made a bad situation that little bit worse.

Not that it makes much odds this late in the game. Darling could talk the economy up, down or sideways for all the difference it would make now – as an influential new report demonstrates.

The Organisation for Economic Co-operation and Development (OECD) has published its growth forecasts for the G7 group of leading economies. Here’s what the OECD predicts for the rest of this year:

GDP Growth in the G7 countries (annualised quarter on quarter growth, %)

	2008 Q3	2008 Q4
Japan	2.4	1.4
United States	0.9	0.7
Canada	0.8	2
G7	0.8	0.7
Euro	0.4	0.8
France	0.2	0.6
Germany	0	0.1
Italy	0	0.6
United Kingdom	-0.3	-0.4

Source: OECD

As you can see, it reckons the UK has already slipped into recession. By the end of this year, according to the forecast, we will have posted two consecutive quarters of negative growth.

Alarmingly, the OECD reckons Britain’s is the only major economy that will hit recession this year. So if they haven’t already, the newspapers will soon be raiding their archives for those ‘sick man of Europe’ articles penned 30 years ago.

One thing is abundantly clear. Going forward, Britain will be a bad place to do business. This, we expect, will have a negative impact on investments.

But there is protective action you can take. We’ve already identified one major global trend which British investors can exploit. This trend is set to continue regardless of what happens to the British economy. Find out here how you could profit from this trend.

And later this week I’ll be unveiling a brand new report that offers you an alternative to stocks. We expect the investment we’ve identified will actually benefit as Britain’s economy weakens.

Source: Can Telling A Lie Save The Economy?