Britain's economy may not begin to grow again until the end of next year, according to a leading international think tank, in a blow for Alistair Darling just a day after the Chancellor gave his big-spend Pre-Budget Report aimed at tackling the crisis.

The latest report by the Organisation for Economic Co-operation and Development (OECD), published today, gives warning that UK construction will remain in the doldrums while house prices will drop and unemployment will surge rapidly.

"Growth may resume only in late 2009," the OECD said in its report, which offers a particularly stark projection for the economies of the forecaster's 31 member countries.

The OECD's expectations for UK growth contrast with Mr Darling's forecast yesterday that after two consecutive quarters of shrinking GDP in 2009, the economy will begin to recover.

Overall, according to Mr Darling, next year's GDP will fall between -0.75 per cent and -1.25 per cent, due to the first two quarters of contraction.

The CBI, the lobby group for business, is expecting economic growth to return in the fourth quarter next year.

The OECD said: "Unemployment is set to rise rapidly, but should stabilise in 2010. Inflation should recede, reflecting the recent falls in energy and food prices and the increasing output gap."

UK unemployment is currently at an 11-year high of 1.82 million.

The OECD welcomed Mr Darling's pre-budget package yesterday and encouraged the Bank of England to continue with its rate-cutting efforts. The Bank cut the cost of borrowing last month by 1.5 per cent to just 3 per cent, its lowest level in over 50 years. Yesterday, Mr Darling unveiled a £20 billion fiscal stimulus programme designed to head off the worst effects of the recession. Mr Darling will cut taxes on goods and services but fund his programme with a borrowing spree and a hit on high-earners.

Mr Darling, who has already ploughed £37 billion into a dramatic bailout of the nation's failing banks, has promised to spend his way out of Britain's recession.

Borrowing will hit levels not seen since wartime as Government debt prepares to top £1 trillion for the first time.

The OECD is predicting Europe-wide unemployment will surge by 8 million over the next two years from 34 million now to 42 million by 2010.

“Much will depend on how quickly the financial crisis - the main driver of the downturn - is overcome,” Klaus Schmidt-Hebbel, the OECD's chief economist said.

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